AFFIDAVIT
I, l^^-^^ being duly sworn, hereby state as
follows :
I. INTRODUCTION
1. I am a Special Agent ("SA") with the Federal Bureau of
Investigation ("FBI"), and have been so employed for
approximately seven years. I am currently assigned to the
Public Corruption Squad in the Los Angeles Division, where I
specialize in the investigation of corrupt government officials,
During my employment with the FBI, I have participated in
investigations involving public corruption, bribery, fraud
against the government, bank and loan fraud, wire fraud, mail
fraud, social security fraud, and money laundering. Many of
these investigations have involved the use of informants and
and ha 1
cooperating witnesses, and have required financial analysis. I
have also participated in the execution of numerous search and
arrest warrants. I have conducted physical surveillance and
have monitored electronic surveillance. In addition, I have
attended numerous training sessions on the investigation of
public corruption and other white collar crimes, including the
collection of evidence. I have been informed that RONALD
CALDERON, as a California State Senator, would have received
i
training and training materials on ethics and what his
obligations are regarding gifts , bribes , gratuities , travel
expenses, conflicts of interest, and use of campaign funds. I
have also been informed that RONALD CALDERON would have been
required to file financial disclosures, such as a Statement of
Economic Interest (Form 700) , with the Fair Political Practices
Commission and/or the State of California while in office,
2. This affidavit is made in support of an application
for a search warrant for the Capitol Office of California State
Senator Ronald Calderon, which is located in Room 5066 of the
California State Capitol, a building facing 10 th Street between
"L" Street and "N" Street in Sacramento, California, 95814 (the
"SUBJECT PREMISES")/ a more detailed description of which is
provided in Attachment A. The requested search warrant for the
SUBJECT PREMISES includes RONALD CALDERON' s personal: office and
taff, and an^
the offices of his staff, and any common areas. For the reasons
set forth below, I respectfully submit there is probable cause
to believe that the SUBJECT PREMISES contains evidence,
contraband, fruits , or instrumentalities of criminal violations
of 18 U.S.C. §§ 371 (Conspiracy), 666 (Bribery Concerning
Programs Receiving Federal Funds) , 1341 (Mail Fraud) , 1343 (Wire
Fraud) , 1346 (Honest Services Fraud) , and 1951 (Extortion Under
Color of Official Right) (collectively, "the Subject Offenses").
3. The facts set forth in this affidavit are based upon my
personal observations, my training and experience, and
2 -
information obtained from other agents and witnesses. This
affidavit is intended to show merely that there is sufficient
probable cause for the requested search warrant and does not
purport to set forth all of my knowledge of or investigation
into this matter.
4. The conversations referenced in this affidavit were
often quite lengthy and transcripts are still only in draft
form. This is because, in large part, of the number of
recordings and the speed with which the underlying investigation
has moved forward. Therefore, while references in this
affidavit to recorded conversations describe the substance of
what was said, these descriptions are based on drafts of the
transcripts of these recorded conversations.
II. SUMMARY OF PROBABLE CAUSE
•obable c<
5. There is probable cause to believe that RONALD
CALDERON, a California State Senator, has committed the Subject
Offenses by accepting approximately $60,000 in bribes from an
undercover FBI agent ("the UC" ) in exchange for (1) directly
enriching the UC's business by supporting legislation in the
California Senate that would lower the amount of money
independent filmmakers have to spend on a film's budget in order
to qualify for a California tax credit; and (2) indirectly
enriching the UC by hiring the UC's purported girlfriend, UC-2,
to a Senate staff position funded by the State of California. 1
There is also probable cause to believe that RONALD CALDERON
participated in a separate bribery scheme with MICHAEL D .
DROBOT, the Chief Executive Officer of the Pacific Hospital of
Long Beach, and accepted approximately $28,000 in bribes from
DROBOT m exchange for directly enriching DROBOT' s business by
supporting legislation that would delay or limit changes in
California's workers' compensation laws relating to the amount
of money medical care providers are reimbursed for performing
spinal surgeries .
6. There is probable cause to believe that DROBOT has also
been paying RONALD CALDERON' s brother and former California
State Assemblyman, THOMAS CALDERON, approximately $10,000 per
month in connection with the bribery scheme. Although the
payments are purportedly for THOMAS CALDERON to act as DROBOT' s
consultant in connection with the spinal surgery legislation,
There is also probable cause to
believe that THOMAS CALDERON is facilitating bribe payments to
RONALD CALDERON. In particular, a $25,000 bribe the UC paid to
1 Based on my previous investigations, discussions with other law
enforcement personnel, my training and experience, and internet
research, I know that, in any one year period, the state of
California receives in excess of $10,000 in Federal assistance.
RONALD CALDERON went through Californians for Diversity, a
California company that holds itself out as a 501(c) (4)
Nonprofit Public Benefit Organization. According to RONALD
CALDERON, the money contributed to this nonprofit organization
is controlled by THOMAS CALDERON and they (RONALD CALDERON and
THOMAS CALDERON) intend to use that money when RONALD CALDERON
is no longer in public office.
7. The evidence developed to date relating to RONALD
CALDERON' s and THOMAS CALDERON' s bribery schemes can be
summarized as follows:
a. The Tax Credit Legislation - Beginning in or
about February 2 012 and continuing through the present, RONALD
CALDERON has accepted approximately $60,000 in bribe payments
from the UC, who is posing as the owner of a film studio in
downtown Los Angeles that provides studio facilities to
independent films and commercials. At RONALD CALDERON' s
direction, the UC made nine $3,000 payments to RONALD CALDERON' s
daughter, JESSICA CALDERON, who, according to an employment
agreement RONALD CALDERON drafted, works for the UC. JESSICA
CALDERON has received these payments even though she has never
done any work for the UC. In addition, UC-3, see infra <h 15(c),
has made one $3,000 payment to RONALD CALDERON in cash. In
exchange for these payments, RONALD CALDERON has agreed to help
enrich the UC's purported film business by seeking an amendment
to Section 17053.85 of the California Revenue and Taxation Code,
which would lower the threshold of expenditures necessary for
independent films to qualify for a tax credit from $1 million to
$750,000. RONALD CALDERON was unable to introduce the $750,000
amendment to the tax credit legislation during California's 2012
.legislative session as he originally promised the UC. However,
RONALD CALDERON has continued to take official action on the
-
UC's behalf by seeking to get the amendment introduced in 2013,
either by including it in a spot bill RONALD CALDERON introduced
himself (Senate Bill ("SB") 317), or by including it in a bill
introduced by California State Senator Ted Lieu (SB 370) .
b. Hiring UC-2 As A Legislative Staffer - Beginning
in or about October 2 012 and continuing through on or about
March 13, 2013, RONALD CALDERON accepted more than $30,000 in
bribe payments from the UC in exchange for hiring the UC's
purported girlfriend, UC-2, as a legislative staffer whose
salary was to be funded by the State of California. In return
for the bribe payments, RONALD CALDERON did, in fact, hire UC-2
as an employee of the State of California, but the UC later
advised RONALD CALDERON that UC-2 would not be taking the
position because she was no longer in a relationship with the
UC. At RONALD CALDERON' s direction, the UC paid, among others,
the following bribes in exchange for RONALD CALDERON getting UC-
2 the job: a $5,000 payment towards the college tuition for
- 6 -
RONALD CALDERON's son, Zachary Calderon, and a $25,000 payment
to Californians for Diversity, a California corporation
controlled by THOMAS CALDERON.
c. The Spinal Surgery Legislation - Beginning on a
date unknown and continuing until at least in or about August
2012, RONALD CALDERON accepted approximately $28,000 in bribe
payments from DROBOT. The bribes were disguised as payments to
RONALD CALDERON's son, Zachary Calderon, who, according to
RONALD CALDERON, worked for DROBOT each summer. The payments,
however, in many instances, went directly into an account
controlled by RONALD CALDERON. In exchange for the bribe
payments, RONALD CALDERON helped DROBOT get spinal surgery
legislation, which would economically harm DROBOT' s business,
either delayed or amended*
- 7
Ill- PRIOR SEARCH WARRANT APPLICATIONS
8. On October 16, 2012, the Honorable Paul L . Abrams,
United States Magistrate Judge for the Central District of
California, authorized the government to search RONALD
CALDERON' s AOL email account, in substance, for evidence
relating to RONALD CALDERON' s support of the tax credit
legislation in exchange for bribes ("search warrant #1") . See
CDCA CR 12-2390M.
9. Then, on March 11, 2013, Magistrate Judge Abrams
authorized the government to conduct a follow-up search of
RONALD CALDERON' s AOL email account, in substance, for evidence
relating to the tax credit legislation, the hiring of UC-2, and
the spinal surgery legislation ("search warrant #2") .
10. That same day, on March 11, 2013, Magistrate Judge
Abrams authorized the government to search RONALD CALDERON' s i-
cloud email account , in substance , for evidence relating to the
tax credit legislation and the hiring of UC-2 ("search warrant
#3"). See CDCA 13-0817M. Then, on April 3, 2013, Magistrate
Judge Jean P. Rosenbluth authorized the government to search
several locations, in substance, for evidence related to MICHAEL
D. DROBOT's health care fraud scheme (search warrant #4) . See
CDCA SA 13-115M, 13-116M, 13-117M, 13-127M, 13-132M, and 13-
133M.
- 8 -
11. In addition, the prosecutor and I submitted an
application for an order authorizing the initial interception of
wire and electronic communications over RONALD CALDERON's
cellular telephone, which United States District Judge Audrey B.
Collins signed on March 8, 2013. On April 9, 2013, United
States District Judge Collins signed an order renewing the
interception of wire communications over RONALD CALDERON's
cellular telephone for a second 30 day time period.
IV. PRIOR INVESTIGATION
12. I began an investigation of RONALD CALDERON, THOMAS
CALDERON, and Charles Calderon (RONALD CALDERON's oldest brother
who formerly served as the Majority Leader in the Assembly) , on
or about October 15, 2007, after receiving information from the
Fair Political Practices Commission and other sources. The
investigation had to do, in part, with a $1 million check THOMAS
CALDERON received from DROBOT, the Chief Executive Officer of
Pacific Hospital of Long Beach, who retained THOMAS CALDERON as
a consultant to negotiate with the State Compensation Insurance
Fund, after THOMAS CALDERON left the California Assembly. 2 It
was suspected that this exceptionally large and unusual payment
might evidence that THOMAS CALDERON was using his brothers'
2 See details in footnote 23 below.
political influence to favor DROBOT xn return for monetary
compensation, that is, a bribe.
13. In or about December 2008, my investigation was added
to an undercover investigation being conducted out of the FBI's
Sacramento Field Office ("FBI Sacramento"). The undercover
investigation involved two undercover FBI agents posing as
venture capitalists, who were eventually introduced to RONALD
CALDERON and THOMAS CALDERON. The undercover FBI agents
separately told RONALD CALDERON and THOMAS CALDERON that they
were interested in having legislation introduced in the
California Senate that would be financially beneficial to their
prospective investments. Neither RONALD CALDERON nor THOMAS
CALDERON solicited or accepted a bribe in connection with their
14. On October 18, 2011, the FBI's Los Angeles Field
legislation ,
Office ("FBI Los Angeles") initiated an undercover investigation
targeting two different public officials (not RONALD CALDERON or
THOMAS CALDERON) in Los Angeles. During the course of that
investigation, the UC was introduced to RONALD CALDERON and the
events set forth below followed. On April 9, 2012, FBI Los
Angeles added RONALD CALDERON as a subject of its undercover
investigation, and on December 19, 2012, FBI Sacramento closed
its undercover investigation .
- 10 -
V. PROBABLE CAUSE
A. RELEVANT PERSONS & OFFICIALS
15 . The following are the relevant individuals and public
officials that will be referenced in my affidavit:
a. The UC - The UC is an undercover FBI agent who
has held himself out to RONALD CALDERON, JESSICA CALDERON,
THOMAS CALDERON, and others as the owner of a film studio in
downtown Los Angeles providing studio facilities for independent
films and commercials .
b. UC-2 - UC-2 is an undercover FBI agent who has
held herself out to RONALD CALDERON, JESSICA CALDERON, THOMAS
CALDERON, and others as the UC's attractive girlfriend with a
struggling modeling career,
c -. UC-3 - UC-3 is an undercover FBI agent who has
held himself out to RONALD CALDERON, THOMAS CALDERON, and others
as the UC's investor in the UC's studio.
d. CHS-1 - CHS-1 (hereinafter gggjjj) is a reliable
FBI confidential source who has been held out to RONALD
CALDERON, JESSICA CALDERON, and THOMAS CALDERON as the UC's
business partner in the UC's studio.
e. CHS -2 - CHS-2 (hereinafter is a reliable
FBI confidential source who
lhas provided reliable information in
the past on RONALD CALDERON.
- 11 -
h. Senator Kevin de Leon - Senator de Leon is a
California State Senator representing California's 22nd
District, which includes the Cities of Los Angeles, Alhambra,
Maywood, San Marino, South Pasadena, Vernon and parts of
unincorporated Los Angeles County. In exchange for the bribe
payments outlined below, RONALD CALDERON has taken official
action in seeking the support of Senator de Leon for the tax
credit legislation and the spinal surgery legislation.
- 12
i. Senator Darrell Steinberg - Senator Steinberg is
the President pro Tempore ("Pro Tern" ) of the California State
Senate. He was elected to the Senate in 2006 and his Sixth
district includes the capital city of Sacramento, parts of Elk
Grove, Citrus Heights and Rancho Cordova. In exchange for the
bribe payments outlined below, RONALD CALDERON has taken
official action in seeking the support of Senator Steinberg for
the tax credit legislation.
j . Senator Ted Lieu - Senator Lieu is a California
State Senator representing nearly 1 million residents of the
coastal Senate district on the West side of Los Angeles, which
includes the cities of Carson, El Segundo, Hermosa Beach,
Lomita, Manhattan Beach, Redondo Beach and Torrance, as well as
portions of Long Beach, Los Angeles and San Pedro. In exchange
for the bribe payments outlined below, RONALD CALDERON and
THOMAS CALDERON pressured Senator Lieu to drop legislation that
would have frustrated DROBOT's health care fraud scheme.
k. Senator Ricardo Lara - Senator Lara was elected
wi
Lth overwhelming support in November 2 012 to represent the
Southeast Los Angeles County cities of the 33rd Senate District.
As set forth below, Senator de Leon caused $25,000 to be
contributed to Californians for Diversity, the California
corporation controlled by THOMAS CALDERON, in exchange for
- 13 -
RONALD CALDERON agreeing not to challenge Senator Lara to become
the Chairman of the Latino Caucus.
B. THE CALDERONS
16. According to the website sd3 0.senate.ca.gov ("RONALD
CALDERON 7 s website"), which I have visited several times during
the course of my investigation, RONALD CALDERON' s family and
political background is as follows:
a. RONALD CALDERON was elected to the California
State Senate (District 30) in November 2006.
b. RONALD CALDERON represents the cities of Bell,
Bell Gardens, Commerce, Cudahy, Huntington Park, La Mirada, Los
Angeles, Montebello, Norwalk, Pico Rivera, Santa Fe Springs,
South El Monte, South Gate, Whittier, East La Mirada, East Los
Angeles, Florence -Graham, Hacienda Heights, South Whittier, and
West Whittier. (This will be subject to change once new Senate
District lines become official) .
c. RONALD CALDERON serves as a member of the
California Wine Industry Committee, the Joint Committee on the
Arts, the Environmental Quality Committee, the Governmental
Organization Committee, and he is a highly respected member of
the California Film Commission, joining the likes of Clint
Eastwood and Danny DeVito in promoting California's film
industry.
- 14 -
d. RONALD CALDERON currently lives in Montebello
with his wife Ana Calderon and their daughter JESSICA CALDERON.
JESSICA CALDERON is a recent graduate of Cal State Fullerton.
Zachary Calderon (RONALD CALDERON' s only son) attends the
Berklee College of Music in Boston, Massachusetts.
e. RONALD CALDERON is the second of his family to
serve in the California Senate and the third to hold a seat in
the California legislature. RONALD CALDERON' s oldest brother,
Charles Calderon was elected to the California State Senate in
1990 and termed out in 1998. RONALD CALDERON' s middle brother,
THOMAS CALDERON, served in the California Assembly from 1998 to
2002 .
17. According to the website www.charlescalderon.com,
Charles Calderon served in the California Assembly for the 58th
Assembly District, where he was the Majority Leader. According
to the website http://asmdc.org/members/a58, in November 2012 he
was succeeded by current Assemblyman Christina Garcia.
18 .
THOMAS CALDERON is
the Executive Director of Calif ornians For Diversity.
19. I have reviewed bank records obtained from Banco
Popular pursuant to a federal grand jury subpoena and learned
m 15 -
that THOMAS CALDERON is also the signatory on a bank account
opened in the name of the Calderon Group.
C. THE TAX CREDIT LEGISLATION
i . Senate Bill 1167
20. On February 5, 2013, I visited the website
www.leginfo.ca.gov, a website hosted by the State of California,
and learned that on February 22, 2012, RONALD CALDERON
introduced Senate Bill ("SB") 1167 ("the tax credit
legislation") . In summary, SB 1167 sought to amend tax credit
legislation RONALD CALDERON had previously introduced in 2009
by, among other things, extending the "tax credits five
additional years, until July 1, 2020." Two subsequent
amendments were offered to the tax credit legislation on June 4,
2012 and July 5, 2012. None of the three amendments sought to
amend the definition of "independent film." In other words,
Section 17053.85 of the California Revenue and Taxation Code
would have still provided as follows:
"Independent film" means a motion picture with a
minimum budget of one million dollars
($1,000,000) and a maximum budget of ten million
dollars ($10,000,000) that is produced by a
company that is not publicly traded and publicly
traded companies do not own, directly or
indirectly, more than 25 percent of the producing
company.
ii . The UC Hires JESSICA CALDERON
21. On or about October 18, 2011, the FBI's Los Angeles
- 16 -
Field Office initiated an undercover operation in which the UC
posed as the owner of a film studio in downtown Los Angeles, who
provided studio facilities for independent films and
commercials -
22. On February 24, 2012, RONALD CALDERON was introduced
to the UC during a lunch held in Los Angeles, California. Also
present were I ffi ^ ™ " r *TSS^^ ' ^S^ iii s»—aL^J iSj
23. I monitored this meeting as it was taking place using
an audio transmitter. I have since listened to a recording of
the meeting and learned, among other things, the following:
a. The UC introduced himself to RONALD CALDERON and
said that he owned a film studio in downtown Los Angeles, where
he provided studio facilities for independent films and
commercials .
b. RONALD CALDERON explained to the UC that he had
introduced a movie production tax credit bill in California
three years earlier, which was later enacted and provided a $500
million tax credit to filmmakers for the next five years using a
lottery system through the California Film Commission.
c. RONALD CALDERON told the UC that every year since
the tax credit legislation was enacted the 100 million dollars
- 17 -
allocated for that year had immediately run out as soon as the
lottery was opened.
d. RONALD CALDERON told the UC that more tax credits
would be available in the future, but said it was very political
and he (RONALD CALDERON) had to work from the top down, starting
with the governor, to make sure the bill was signed if it made
it to the governor's desk.
e. The UC asked RONALD CALDERON if there was
anything the UC could do for him. RONALD CALDERON said he would
be running for the California State Assembly in 2 014 and asked
t.
the UC if he could help with that.
f. Towards the end of the meeting, RONALD CALDERON
told the UC that his son, Zachary Calderon, was studying music
at Berklee College in Boston and that his daughter, JESSICA
CALDERON, was attending the LA Art Institute for Interior Desiqn
and had already received a degree in Theatre Arts from CSU
Fullerton. RONALD CALDERON told the UC that his daughter had
made a movie and was the line producer for a film he referred to
as "American Gigolo 2."
g, RONALD CALDERON told the UC that JESSICA CALDERON
and others involved with the script for American Gigolo 2 were
looking for producers. RONALD CALDERON asked the UC if he would
like to look at the script and see if the UC's studio might be
- 18
interested in getting behind the movie. RONALD CALDERON gave
the UC his business card.
h. On February 24, 2 012, the UC received a text
message from RONALD CALDERON over his cellular telephone
stating, " [UC] . Great lunch! Thanks. Here is my cell! I am
emailing u next."
24. On June 21, 2012, the UC and RONALD CALDERON met alone
at a restaurant in Pico Rivera, California for dinner. During
the meeting, RONALD CALDERON told the UC, among other things, '
"one way you could be a real help to [JESSICA CALDERON] is, you
got any work? ... I think she's a good investment. Any, any
work, uh you could find her would be well appreciated and you'll
appreciate her work. Are - I told you man, anything you can do,
any help you could do for my kids is, is - you know that's^
that's diamonds for me. That's diamonds."
25. The UC told RONALD CALDERON that he had looked over
the script for American Gigolo 2 and felt like the budget for
the film was around $500,000 given the number of locations in
the script. The UC suggested that it might be worth investing
in the film if the threshold for the tax credit legislation was
lowered to $500,000. The UC told RONALD CALDERON that just the
mention of the tax credit would put his investors "over the
roof . "
- 19 -
26. RONALD CALDERON told the UC the tax credit legislation
would be before the governance committee the following week and
said, "there might be a play, you know, to lower, to lower the
tax credit. Uh, for movies, for inde- or indies." RONALD
CALDERON then suggested that he would be willing to hire the
UC's girlfriend (UC-2) if the UC would hire JESSICA CALDERON at
the UC's studio, since Mi] t helps both of us." RONALD CALDERON
said that his daughter, JESSICA CALDERON, could do any project
the UC wanted done. RONALD CALDERON said the only limitation
was that JESSICA CALDERON would need the flexibility to go to
class two days a week and to do her internship at the design
center two days a week.
27. With respect to JESSICA CALDERON' s salary, RONALD
CALDERON said, "all I need her to do is make enough money to pay
for her - the rest of her schooling, which isn't a lot. It's
like - it's like, two thousand, three thousand a year plus, uh,
uh - no quarter, so six thousand. And then buy her own
insurance which is about four hundred, five hundred bucks a
month ... if she could work two- three days a week for you and
make, you know, urn, twenty five hundred bucks a month. Two
thousand five hundred, uh - I mean you'd get your money's worth
out of her. She's a workhorse... But that would make uh - man
that would make all the difference in the world for her."
- 20 -
28. The UC asked RONALD CALDERON if there was still a
possibility that the threshold for the tax credit legislation
could come down to $500,000. RONALD CALDERON responded, "The -
there - there - there's a chance. There's a shot. You know
it's a matter of where - what negotiating position I put myself
in and how much they're actually willing to give us." RONALD
CALDERON went on to explain that certain industries like the
labor industry might push back against lowering the tax credit
to $500,000.
29. The UC asked RONALD CALDERON what number would keep
the labor industry away. RONALD CALDERON said that he felt he
could get $750,000 through the Senate Committee, but that he
would have to have a meeting with the indies and labor
industries before the amendment got to the Assembly Committee so
he could let the labor industry know he wanted to "lower it just
a tad." RONALD CALDERON said he would have the meeting in his
office and tell the labor industry that if they want more
regular work for their members they should get onboard with the
legislation. RONALD CALDERON felt that if the labor industry
got onboard the "big guys" (presumably major film production
companies) would not want to lose the entire bill "over that."
30. After hearing this, the UC told RONALD CALDERON that
he was willing to put JESSICA CALDERON on a retainer during the
remainder of her college. RONALD CALDERON responded, "Oh,
- 21 -
great!" The UC said he was ready to move in that direction and
asked RONALD CALDERON what they needed to do in order to make
the $750,000 happen. The UC indicated that he was willing to
put JESSICA CALDERON on his payroll the following week if the
$750,000 could "happen sooner rather than later," The UC
explained to RONALD CALDERON that lowering the tax credit to
$750,000 would be a real selling point for the UC studio.
31. RONALD CALDERON responded, "Right. Well, considering,
considering that the, the committee and the chair, they don't
give a shit. What the machinations are. They don't care. It's
all about creating jobs, keeping the movie industry here in
California, right? Urn. Let me do this. To answer your
question, I can play - I can play poker and hold out, so . . .
And I'm the author of the bill. I'm not going to move the bill
forward unless I get a deficit. Period. Right? And be willing
for it to fall apart, which it won't. But let me read the
language and sit down with my staff. And I can do this, you
know, Monday, Tuesday when I go back, and see what we can do to
tweak the language so that I can make that, I can make that play
and I know that it can happen. . ."
32. On June 29, 2012, the UC and RONALD CALDERON met for
breakfast at a diner located in or around Montebello,
California. During the meeting, RONALD CALDERON told the UC
that he had not yet introduced the $750,000 amendment to the tax
- 22 -
credit legislation, RONALD CALDERON said he could introduce the
amendment either before it goes to the Senate's Appropriations
Committee or when it goes to the Assembly side.
33. RONALD CALDERON and the UC then discussed JESSICA
CALDERON' s employment. RONALD CALDERON suggested drawing up a
contract that would make JESSICA CALDERON an independent
contractor for the UC studio. RONALD CALDERON told the UC it
was "better to keep it legit." RONALD CALDERON offered to draw
up the contract and send it over to the UC by July 15, 2012.
34. The UC told RONALD CALDERON that he had JESSICA
CALDERON' s first pay check with him at the diner and was
prepared to give it to RONALD CALDERON that day. RONALD
CALDERON initially agreed to take the check, but later told the
UC to mail it to JESSICA CALDERON. Earlier in their
conversation, RONALD CALDERON told the UC about an investigation
the United States Attorney's Office and the FBI were conducting
into public officials in Cudahy, California. RONALD CALDERON
had told the UC you never take money directly from people and
you have to be careful about a tit-for-tat relationship.
35. On July 4, 2 012, approximately five days after RONALD
CALDERON told the UC to mail JESSICA CALDERON' s first paycheck,
- 23 -
the UC received an email from RONALD CALDERON that said, among
other things, "Didn't receive anything yesterday FYi . " 3
36. On July 17, 2012, the UC and RONALD CALDERON met at
the UC's apartment in downtown Los Angeles, where they
discussed, among other things, the tax credit legislation and
JESSICA CALDERON' s employment:
a. The UC informed RONALD CALDERON that having the
UC studio enter into a contract with JESSICA CALDERON wherein
she would be paid a monthly retainer for serving as the UC
er was "i
studio's set designer was "not the industry standard" and was
"not common. "
b. The UC explained to RONALD <&lLDERON the real
reason for hiring JESSICA CALDERON:
UC ...it's not. a concern to me. Money is not an object.
mean...I'm ready to write a check for the next year...if
that ' s what you want... .
RC Right...right .
UC ...f or...f or...everything. That ' s...that' s not the issue.
And it's never been the issue.
RC Uh huh.
UC Jessica's talent...uh...her acumen...that ' s not even an
issue. That the whole concept behind this was...we...we
have a relationship. We have a professional
relationship. We have a business relationship. And,
3 This email and several of the others referenced in my
affidavit were sent from RONALD CALDERON' s America Online
("AOL") email account, a provider of electronic communications
service and remote computing services located in Dulles,
Virginia .
- 24
to put it in very blunt terms, me hiring Jessica was
not about her talent , right? It was more about
accommodating something that you needed. And you
needed me to take care...
RC Right .
UC ...helping your children,
RC Right .
c . RONALD CALDERON said that he viewed the document
he had prepared as an "agreement" and said it was "not a
contract." RONALD CALDERON also addressed the UC's reason for
hiring JESSICA CALDERON:
RC The second problem I have...that,..um...and again this is an
uncomfortable thing to do, okay, but because of my
position, you cannot.,.we cannot have a conversation we
just had. We cannot have a quid pro quo conversation.
UC But I feel like that's...I mean... I understand...
RC No [UI]...
UC ...where you are coming from. Okay? I totally get it.
But the reality of it is...I mean this is something I ' ve
engaged in all the time in India...this is the thing
that I'm doing right now in Virginia. And it's
just...for me, it's just the price of doing business.
If you wanna call it, something else, I...I completely
understand f or...comf ort levels,
RC What...what...what I have to say...what I have to
say...is...that I cannot guarantee that I can help you. I
can' t . . And I cannot take payment...or...uh...negotiate
payment for Jessica in any way with the...with the...with
the understanding that I'm gonna do this for you, and
it's gonna be deliberate. Um...because I would do that
for you whether...whether this was involved or not,
because I've been trying to figure out a way,..to have
more minorities in film benef it...f rom this tax credit.
And this is the way to do it by...by...uh...lowering the
- 25 -
threshold amount and possibly even expanding the ten
tnillion...the guaranteed ten percent—whatever that
is...to...f if teen percent or something like that. 4
d. After explaining to the UC the types of
conversations they "cannot have" and what RONALD CALDERON would
"have to say" if those conversations came up, RONALD CALDERON
went on to assure the UC that he would "deliver" on the
legislation by having it introduced in the California Senate by
Senator Steinberg, and said- that if he did not deliver on the
legislation, the UC would have "no obligation" to continue
paying JESSICA CALDERON under the terms of the "agreement" s
RC And [Senator Steinberg] said...he'll get my bill out of
appropriations, and once it's cleared in senate ... it ' s
a vehicle that can't be stopped. Unu.then I'm gonna
ask him...to...to..,uh..,um...demand that amendment. It's gonna
be him saying, I ain't supporting this unless we do
more for minority, uh...smaller independent films. So I
wanna add.„I wanna either lower the threshold. . .you
know, and/or increase the...uh...appropriation. Or you
know, one of the two, but somehow...with the
threshold...so we have more minorities.
UC Sure .
RC So...that's the play. Okay? The industry might come
back. I doubt if they are gonna come back and say,
nah forget it, all bets are off. We're not gonna
lower it..,f or..,you know...f rom...uh...uh...a million to five
hundred thousand.
UC Sure .
4 On February 29, 2 012, RONALD CALDERON had received an email
from Tommy Ross, the President and CEO of Pinnacle Strategy
Group, which referenced a conversation with RONALD CALDERON
regarding the extent to which minority producers are informed of
the production tax process and its benefits, and possibly doing
a "carve out" of the tax credit for minorities.
- 26 -
* * *
UC I guess I was confused, because...
RC Yeah.
UC ...when we first started talking about this, and I joked
with you about...bringing Jessica on...
RC Yeah.
UC ...or doing Jessica's film and joked about how it
wouldn't even qualify for the tax credit.
RC Right .
UC The first thing I thought about was.„you came to me and
said, x would it help?'
RC Yeah.
UC And I felt as if...there was some type of...
RC You're right. I did come to you, didn't I?
UC And I felt like,..that was a sign to me... I needed
to help you. I mean...I would help you anyway.
But...realistically speaking, you're doing a huge thing
for my studic.for me...and I wanna make sure...that I take
care of you.
Yeah. When.„and you know... [UI] , and if you look at
this,.,this is exactly why I phrased it [UI] did
it...because if I'm not able to deliver and you know,
and you feel that you need to move on.,.and...a certain
direction...you know...there ' s no obligation.
Yeah, but...then...then...and again, ...it ' s not so
much...f or,..f or me. I haven't had the benefit of looking
at this before...
RC Yeah,
UC ...it wasn't so much the idea of...hiring Jessica that
worried me. Or.„paying for Jessica's salary...or
whatever it was. The issue was.„pl2|J now has eyes
RC
UC
- 27 -
on...what's going on.
RC Right .
UC And this is business...arrangement between you and I,
and it's not between
e. RONALD CALDERON made it clear to the UC that "it
may not happen" but that he would "do everything [he] can" for
it to happen. RONALD CALDERON added, Mi] f you think through it
logically...there' s no reason why they would object to it,
especially when it's this close to being done."
f . The UC told RONALD CALDERON he was not expecting
RONALD CALDERON to be a "magic man" and was willing hire JESSICA
CALDERON to "reward" RONALD CALDERON for his "support" of the
legislation :
RONALD CALDEROI
UC I don't I, again, it's politics, and I don't look for
guarantees in it, but...I do look for support.
RC Right .
UC And...support is rewarded. I mean, I...for lack of better
term. And I wanna make sure I reward... your support
RC We'll...
UC [UI]
RC The way you earn my support is...is...um...you know, take
advantage of it, make a lot of good movies, hire
people, and create jobs. That's how you...that's how
you reward my support . And...and...the reason why I
wanted this, if you don't wanna do this, I'm fine with
that, the reason why I wanted this, is that...I want you
to hire Jessica and, you know, for her...for her
- 28 -
talents. And uh.,.and more than just because...you know,
it's one thing, even if it's a f riend...just a fact that
I'm a senator and it...it creates that..,you know
that...area we don't wanna get in (UNT) .
g. When the UC expressed confusion over this
explanation for hiring JESSICA CALDERON pursuant to a written
agreement, RONALD CALDERON added that having the agreement in
place would prevent the UC's partner, | £g§l from making trouble
about "what we are doing" :
UC You'll- have to excuse me, because I'm ignorant to a
lot of this. It's almost like..,I have to be a bull in
a China shop around you, right now...
RC Yeah.
UC ...and get some guidance.
RC I get it.
UC Because I don't. I'm not operated by the rules for
quite some time, and I don't...I never have.' You know,
I operate by the different set of rules in terms of
profit margin,
RC in Calif ornia...well...it ' s a lot more restrictive here
than any other place in the country, but...but in
general it's still...you know...in general there's this
quid pro quo...that ' s...acceptable , you know...
RC ...and...and uh...uh...there ' s been a lot of people that have
done...I mean even you know...let ' s...let ' s say I'm a
disgruntled partner. Right? And finds out about what
we are doing and they go out, you know...make trouble.
This is why I want.„this is proof...this is,..proof that
you're not doing this for me. You're doing this for
Jessica. Cause she's got a certain skill set. You
know? But,..um...I mean this, you know, ...this...is great...this
- 29 -
is., is. The argument could be made, you know..,that
there's some kind of agreement. Right?
UC Sure ,
RC So I mean if it's implied, it's a big deal.
UC Business card is a business card...it's one thing. She
doesn't know that... I made those for her [laugh]
RC Okay .
UC But, that being said,...
RC Yeah,
UC ...I've always had good relationships, and I think
that's...the basis...the last five girlfriends I've had
still call me. Still checkin on me. Still wanna make
-sure I'm tucked in at night.
UC
RC I wasn't even...I'm just saying...
No , no, no, no .
RC [UI] That kind of shit happen to people get in
trouble.
UC . I completely understand. People wants to screw the
other person over...hold something over their head.
That's never been an issue with me before...
RC Yeah.
UC ...and I don't anticipate being an issue now,
UC Or in the future ,
RC Right ,
UC And it's all about building relationships, and I feel
like you and I hit that point where I'm comfortable
talking with you about this. Only because, it's been
a very stressful week for me for the last couple
weeks. This guy in Florida, is looking for some kind
- 30 -
of—signal that this legislation is going to move
forward. If it doesn't, so be it.
RC I...I...I will...um.,.um...I will be very positive about this.
With your. . .with your...associate... there's no question
about that...because I'm very positive, but I don't see
any...I don' t see it not happening...
UC Sure
RC but you never know. And I can't go into an agreement
with you saying, 'you give, you know, you do this, and
I'll do that ' ...because I, I can't promise you.
UC Sure .
RC You know. So...and it's something...it ' s something that...I
was gonna do anyway...you know.
UC No, I appreciate that, because it's gonna make, help
my business .
RC Yeah . Okay . Great .
37. On July 19, 2012, RONALD CALDERON and his son, Zachary
Calderon, met with the UC and at the UC studio. While the
UC and RONALD CALDERON were alone in the UC's office, the UC
signed the employment agreement RONALD CALDERON had prepared. 5
When the UC asked RONALD CALDERON what amount he should write on
JESSICA CALDERON' s first paycheck, RONALD CALDERON said, "I
think we said three, which would help me cover the tax and all
the other liabilities." When the UC asked RONALD CALDERON what
date he should write on the employment agreement, RONALD
5 On July 17, 2012, Ana Calderon, RONALD CALDERON' s wife,
received an email from RONALD CALDERON in which he asked her to
draft the employment agreement RONALD CALDERON later provided to
the UC and to date the agreement July 1, 2012.
- 31 -
CALDERON said to the UC, referring to the employment agreement,
"Is it okay if we back-date this to July 1 st ?" as the date it was
signed (presumably to justify full payment of the $3,000 for
that month) .
38. The one -page agreement RONALD CALDERON prepared was a
"Studio Services Agreement" that said the UC would "retain"
JESSICA CALDERON on a "monthly retainer" for "an indefinite
period of time" to provide services, including, but not limited
to, "meeting with existing and future clients, set design
consulting, advertising and marketing design consulting, and
general film production assistance and consulting."
39. RONALD CALDERON explained to the UC during their
meeting at the UC studio that JESSICA CALDERON could not attend
the meeting because she was working on a project, but that she
was "done today." RONALD CALDERON told the UC he would have
JESSICA CALDERON sign the agreement and give the UC a copy.
40. On August 1, 2012, the UC contacted RONALD CALDERON
over the telephone to confirm RONALD CALDERON' s residential home
address. After confirming RONALD CALDERON' s address and setting
up a dinner meeting, the UC asked RONALD CALDERON about the tax
credit legislation, resulting in the following exchange:
UC What the- what's the situation with, uh, the tax
credit bill? He [the UC's investor ("UC-3")] says
he's just curious what's going on right now and
where it's at.
- 32 -
RC We are going to, uh, we are going to hear it in
Appropriations possibly Monday, this Monday
UC This Monday?
RC Yeah, I'm gonna try and get it out on
Appropriations Monday, And then we've already put
the, uh, we already put the plan in motion for,
uh, raising the, uh, the production cost for
Indies, uh, to...I'm sorry. Raising the
appropriation to 15%, and the threshold level to
$500, 000 .
UC Okay, fantastic. So what do you think, that's
gonna happen on Monday?
RC No , no , no . What ' s gonna happen is , we ' re gonna
get it out of Appropriations and then, then we go
over to the Assembly. So, we'll have time on the
Assembly side 'cause they'll have two committee
hearings and then it goes to the floor, and then
without amendment it will come back to our house
for concurrence. So, that all has to happen, uh,
you know, in August. So, we're uh, you know,
we're working on it. But we don't want- we don't
want to blow it up before we get it out of, uh,
Appropriation.
UC Okay.
RC Alright .
UC So, the -the amendment won' t happen in
Appropriations then?
RC No. No, no, no. Because then we may, we may piss
off uh, too many people. We gotta lay, you know,
we gotta...it's gotta be delicate to affect your
situation.
UC Okay .
RC Yeah,
UC So you...
RC We have a plan.
- 33 -
When do you think the amendment will take place?
Ummm. When we get to, urn, as soon as we get our
bill out of Appropriations, uh, it will probably
go to the floor, uh, to our floor, uh, within
that same week. Which means the following week,
which should be the week aft-the week after, so
let's say mid August it will be on the, uh, on
the Assembly side, uh, and that's, and when it
goes over there we'll add the amendment.
Okay, so it's mid August we're talking about.
Yes, so a couple of weeks, we should have the
amendment in and, uh, 'cause we wanna work with,
we wanna work with the, uh, labor guys, we wanna
just, we don't wanna just drop it on them, we
wanna work with them, the labor guys, uh, the
Indie film people, and then, urn, and then the big
five, just, you know. And the reason why I think
we ' 11 be able to get it through is that there ' s
only 15, the...right now is a 10% appropriation for
indies, from the tax credit, I'm asking to go to
15 , and then lower the threshold from 1000 , up -
from a million to 500,000. So, that way you just
spreading out , you know , you 're just widening the
piece of pie for the Indie's, uh, so the only one
that might be upset are the big guys, so if they
are, we will have some wiggle room there, we can
lower it, you know, we can lower everything a
little bit more.
Okay.
You know what I'm saying?
All right.
'Give me wiggle room on a million, and then wiggle
room on the uh, on the appropriation.
Okay, I guess, uh, I'll tell you, it's been a
major issue over years as part of this, uh
delicate negotiation with, uh, [the UC's business
investor]. But, I'll tell him more about it, urn.
RC Yeah.
UC 'Cause, I'm sure you saw that New York, obviously
you did, you...
RC Yeah
UC Sent me the article. 6
RC Yeah, I did, yeah, yeah.
UC All right. We know what's going on, and
certainly, you know, I think it's gonna help our
case, uh, 'cause I certainly don't wanna, you
know , lose ground .
RC Right .
RC And I think because...I think that article...I mean,
what's going on in New York is gonna help us with
our negotiations because the industry is not
gonna wanna blow this up over a few million
dollars .
UC Right .
RC They're just not gonna blow it up. So, I think
it's on our side, you know, everything is on our
side and we got the momentum to do it, and of
course there's always, there's- there is the
minority aspect of it. You know, getting more
minority film producers, they are usually
smaller, you know in that smaller, 500,000, to
$750, 000 range.
UC
Okay, all right. Look, uh, I gotta get off the
phone here. But, definitely keep-keep a look out
for the check in the mail tomorrow. Shoot me an
email when you get it, just so I know that you
got it .
On or about July 31, 2 012, the UC had received an email from
RONALD CALDERON containing a newspaper article published in the
Daily Variety. The article explained how the State of New York
had recently passed legislation giving film producers a tax
credit .
- 35 -
RC Okay .
41. Shortly after this meeting, the UC caused a check in
the amount of $3,000 with JESSICA CALDERON's name written on it
as the payee to be mailed via United States mail to RONALD
CALDERON's residence in Montebello, California.
42. On August 2, 2012, after the check was mailed, the UC
received an email from RONALD CALDERON saying, "Package
received. Ty," At that point, although RONALD CALDERON had
invited the UC to have dinner with JESSICA CALDERON and several
others on July 31, 2012, to discuss a project JESSICA CALDERON .
was working on involving Nike sports, a dinner which the UC did
not ultimately attend, JESSICA CALDERON had done no work for the
UC studio or the UC. Nor has JESSICA CALDERON done any work for
the UC studio or the UC as of the date of this affidavit despite
receiving payments totaling $27,000
43. On August 2, 2012, the UC invited RONALD CALDERON to
have dinner on August 9, 2 012 at a restaurant in downtown Los
Angeles. RONALD CALDERON asked the UC if he should bring
JESSICA CALDERON along to the meeting. The UC responded, "Not
necessary, want to focus on this week with my investor and tax
legislation . "
44. On August 10, 2012, the UC, his girlfriend, UC-2,
RONALD CALDERON, and RONALD CALDERON's wife, Ana Calderon,
attended the Imagen Awards ceremony at the Beverly Hilton hotel.
RONALD CALDERON had previously invited the UC and UC-2 to join
him at the event. During this event, RONALD CALDERON told the
UC, "Nobody will ever know that the reason this happened is
because of you, I would not have pushed this hard if it wasn't
for you." RONALD CALDERON further told the UC that he would be
introducing the amendment in the California Senate on Tuesday
(August 14, 2 012) and that it would hit the Assembly floor by
Thursday (August 16, 2012) ,
iii . Proposition 26 and the Letter to the UC's
Investor
45, On August 14, 2012, the UC received an email from
RONALD CALDERON titled "We were just thrown a curveball," The
email, which was originally sent to RONALD CALDERON from
john.scribner@sen.ca.gov and then forwarded to the UC, stated
that Legislative Counsel to the California Senate had just
opined that under the provisions of Prop 26 any amendment
lowering the threshold for the tax credit legislation to
$750,000 would require two-thirds vote. 7 The rationale for Prop
26 being triggered by the proposed amendment was that "we have a
capped amount available for the independents (10 million) we
would potentially be lowering the tax credit some might once
7 The website www.govbuddy.com/directory/staff/CA/, lists John
Scribner as a Legislative Director. I searched Scribner's name
using the California State Bar website www.members.calbar.gov
and he does not appear to be an attorney licensed in the State
of California .
again qualify for." The email also said that RONALD CALDERON
should "drop the payroll service issue" if he (RONALD CALDERON)
no longer intended to introduce the $750,000 amendment, since
this would make it "unnecessary to placate labor."
46. Shortly thereafter, the UC received a second email
time t
from RONALD CALDERON. This
Screwed ! " ********* ' _t iiBjBBB
the email began, "We are
47. The UC wrote back to RONALD CALDERON, "This is
bullshit, Ron. We gotta make this work. Even if the proposed
amendment is shot down, We win. If we don't even propose the
amendment, then I'm done. So is [the UC studio] in CA. All
[the investor] needs is for CA to introduce/demonstrate a
i
willingness . "
- 38 -
48. The response the UC received from RONALD CALDERON was,
"I haven't given up but now we are walking a very fine line.
I'm working with legislative council on this to c if there any
way around this. Also looking into maybe having leg council
delivery on official opinion on the amendments that you can show
[the UC investor] . Worst case scenario. Maybe, maybe.,.we take
the amendments up for a vote on the floor, let them die, then
take up the tax credits as is. Let me get back to you."
49. The UC and RONALD CALDERON had one telephone
conversation on August 14, 2012 and another telephone
conversation on August 15, 2012. During both conversations, the
UC and RONALD CALDERON discussed RONALD CALDERON' S various
strategies for getting the $750,000 amendment passed without
triggering Prop 26. At the outset of the first conversation the
UC told RONALD CALDERON, "Hey, I wanted to make sure you
■
understood that uh the e-mail about it being bullshit and all,
that wasn't directed at you. That was just me being off the
cuff and frustrated with this whole process, 'I know...
[Interrupted]' and You're getting a lot of stuff from me and
I've done stuff for you and we've helped each other out
tremendously and I know we're on the same page."
50. RONALD CALDERON responded to the UC's apology by
saying, "Yeah, you didn't-you didn't hear my uh [chuckles]
lecture this morning either, so.. . I know how you feel uh we're,
um, we're working on it, not gonna — I'm not gonna - I'm not
gonna say anything to you yet till I have all the facts but,
there might be a way around it the problem is, is, uh, it's a
continuing tax credit..."
51. The two strategies that RONALD CALDERON shared with
the UC were, in substance, as follows: (a) have RONALD CALDERON
argue to Legislative Counsel that Prop 26 would not be triggered
by the proposed amendment and that Legislative Counsel's earlier
opinion that lowering the threshold to $750,000 was a "taking
away" for some (a tax) was just a wrong interpretation of Prop
*ld cal;
26 and (b) have RONALD CALDERON' s bill include a "sunset"
provision so that it was no longer an extension of an existing
program but rather a new tax credit, which would make it clear
as some
that the amendment
"taken away. "
52. On August 17, 2012, the UC and RONALD CALDERON met at
the UC studio after RONALD CALDERON failed to introduce the
$750,000 amendment in the California Senate. The UC began the
meeting by telling RONALD CALDERON that he brought JESSICA
CALDERON on the payroll with the goal of helping RONALD CALDERON
and had hoped RONALD CALDERON would help him in return by
introducing the $750,000 amendment to the tax credit
legislation. The UC told RONALD CALDERON that he if he could
not introduce the amendment to the tax credit legislation it was
- 40 -
"not a big deal" and that he did not want to put pressure on
RONALD CALDERON. The UC said, however, that he had made
representations to his investor based on what RONALD CALDERON
told him at the Imagen Awards about introducing the amendment.
53. After RONALD CALDERON gave the UC a brief explanation
of why the amendment could not be introduced as planned, the UC
asked RONALD CALDERON if there was anything RONALD CALDERON
could still do for the UC to help (with UC-3) . RONALD CALDERON
responded, "Certainly... I mean, I am happy to talk to them and
tell them I am interested. Uh, there are shortcomings that we
need to overcome and we need to bring those to liqht... I think I
can still help the industry, you know ... I am all about ... I am
the Chair of the Latino Caucus next year. I want to help my
people. And, they are all, they are all small businesses."
RONALD CALDERON told the UC he wanted to hold public hearings
and encouraged the UC and his investor to testify at them.
54 . RONALD CALDERON reminded the UC that Senator Steinberg
had supported lowering the threshold amount: "That is why it is
all about relationships. I mean, just to get [Senator Steinberg]
to have been behind this, [your investor] needs to know that.
Just the fact that [Senator Steinberg] is behind pushing
lowering the threshold, is huge. It's huge. And he did it
because of our relationship. And, I helped him, he helped me...It
- 41 -
was important to me . I did something that I knew was important
to him. It is all about relationships."
55. The UC told RONALD CALDERON he did not want to put any
pressure on him to do anything. RONALD CALDERON said, "My...my
commitment is as strong, if not stronger, than yours. So, don't
ever feel like you are pressuring me, okay? All you are doing
is sharing your frustration with me."
56. On September 5, 2012, approximately two weeks after
their meeting at the UC studio, the UC received an email from
RONALD CALDERON asking, among other things, "should Jessica
expect a check this month." The UC responded that there was a
small "hiccup" with the check that the UC would explain when
they met up,
57. On September 10, 2012, the UC and RONALD CALDERON met
for dinner again at the Pico Rivera restaurant. During the
meeting, the UC asked RONALD CALDERON if he would be willing to
write a letter to his investor stating his commitment to
introducing legislation that would lower the threshold for the
tax credit legislation to $750,000. RONALD CALDERON immediately
agreed to write the letter but told the UC that he would need to
direct the letter to a broader audience, like an association or
a commission. RONALD CALDERON told the UC it would be fine for
them to make up an association or commission, so long as they
were the ones to whom the letter was addressed.
- 42 -
58. To demonstrate his continued willingness to take
official action to get the amendment introduced, RONALD CALDERON
told the UC how he had purchased two VIP tickets to a Giants
baseball game for Senator Steinberg the week before, RONALD
CALDERON said he also gave two tickets to oil industry
executives so they could meet Senator Steinberg at the game and
help support his campaign. RONALD CALDERON said that after the
game he placed a call to Senator Steinberg and discussed the tax
credit bill.
59. At around this point in the conversation, RONALD
CALDERON asked the UC what the hiccup was with JESSICA
CALDERON' s check for the month of September. The UC told RONALD
CALDERON he wanted to pay JESSICA CALDERON from his personal
bank account as opposed to the UC studio's bank account from now
ited to
on. The UC said he wanted to do this because revenues were down
and he did not want the checks to attract the attention of
his partner in the UC studio. The UC said he wanted to first
ask RONALD CALDERON if switching the source of the payments was
a problem, since RONALD CALDERON was a public official and the
payments to JESSICA CALDERON could now be linked directly to the
UC.
60. RONALD CALDERON told the UC that switching the source
of the payments was fine and that they could simply draw up
another contract listing JESSICA CALDERON as the UC's personal
- 43 -
assistant. The UC gave RONALD CALDERON a third check for $3,000
with JESSICA CALDERON' s name written on it at the restaurant,
who still had done no work for the UC. RONALD CALDERON told the
UC that someday JESSICA CALDERON would be a star for the UC.
61, The next morning, September 11, 2012, the UC received
an email from RONALD CALDERON asking, " [UC] . So which name do
you like? California Independent Film Producers, California
Coalition of Independent Film Producers, California Association
of Independent Film Producers, United Independent Film Producers
of California. Feel free to add to or make suggestions!"
62. The UC responded, "Can it be United Pacific
Independent Producers of California? That will signal to [UC-3]
that you are helping us on this project. I haven't thought of
what address to use, any ideas? Lastly, once we have . a final
draft, can you FedEx to me on your letterhead before I take off
for Spain?"
63. The UC received a response from RONALD CALDERON
saying, "Not necessary. [Your investor] will know the
connection. Better to go with, United Independent Film Producers
of California or United California Independent Film Producers."
The UC received a separate email from RONALD CALDERON saying,
"Let's use your studio address and your name as Executive
Director?"
- 44 -
64. Shortly thereafter, the UC received an email from
RONALD CALDERON containing the first draft of the letter:
it"
Dear [UC] , It is with great pleasure that I
inform you that my Senate Bill SB 1197 passed both
legislative houses and is awaiting signature by
Governor Jerry Brown. However, it is with regret that
I was not successful this time in lowering the film
production budget threshold to below $1,000,000.
That's the bad news, but the good news is that I have
made great progress in moving this agenda forward with
the support of the movie and television industry. I
greatly value the contribution that smaller
independent films add to the California jobs market
and to the California economy. Small businesses are
the backbone of this economy and I believe the
legislature should make great effort in recognizing
this fact. Therefore, it is with great enthusiasm
that I share with you my commitment to providing
smaller budget film tax incentive in the form of
production tax credits. This will be my primary focus
over the next 2 year legislative session. I thank you
for your support in advance in carrying this agenda
forward and look forward to working with your
organization in the future. (Emphasis added.)
65. Before making any changes to the first draft of the
letter, the UC wrote back, "I am ok with not using [the UC
studio's name] in the title if you list [my investor] and I as
the Executive Director. I was just a little concerned about
being sure no one else is using the names you mentioned. I know
for [the UC studio] , I am the only one...."
66. The response from RONALD CALDERON was, "Ok. Will make
the changes. Did you read the draft?"
67. The UC responded, "Ron, I made a few slight changes.
As we discussed last night, your willingness to propose
- 45 -
legislation that would bring it down to $750,000 is very
important to [my investor] . [He] understands and I have made i
clear in the letter that you are not promising it will pass.
The fact that you propose it, is what is important. If we can
keep these changes , it will be exactly what I need. Thanks RC !
68. The response contained the following revisions to the
first draft of the letter:
Dear [UC] , It is with great pleasure that I
inform you that my Senate Bill SB 1197 passed both
legislative houses and is awaiting signature by
Governor Jerry Brown. Although J was not successful
this time in lowering the film production budget
threshold to $750,000 for independent films, I have
made great progress in gathering the support of the
movie and television industry for such legislation. I
know lowering this threshold will greatly benefit
smaller production companies in California and
increase the number of jobs added to the California
economy . Small businesses are the backbone of
California's economy. and I believe the legislature
should make great effort in recognizing this fact.
Therefore, it is with great enthusiasm that I share
with you my commitment to proposing legislation that
would either directly or indirectly lower the film
production budget thresholds for independent films to
$750,000. The economic benefit this will bring to
California's economy has made this my primary focus
over the next two year legislative session. I thank
you for your support in advance in carrying this
agenda forward and look forward to working with your
organization in the future. (Emphasis added.)
69. The UC received an email from RONALD CALDERON saying,
" [UC] , I will have letter ready tomorrow afternoon. Do you want
to just pick it up from me or mail to you?" After a series of
emails with RONALD CALDERON, the UC and RONALD CALDERON
eventually agreed to have JESSICA CALDERON drop off the letter
in an envelope at the UC's apartment in Los Angeles.
70. On September 12, 2012, the UC received a forwarded
email from RONALD CALDERON. The email was originally sent from
RONALD CALDERON to RONALD CALDERON' s secretary and niece,
Michelle Pyne (Michelle.Pyne@sen.ca.gov) on September 11, 2012,
with the following instructions: "For the letter use United
Independent Film Producers of California, And address letter to
[UC] and [UC's investor], both Executive Directors. I will next
forward you the mailing address."
71. On September 12, 2012, RONALD CALDERON sent an email
instructing Pyne to make the following correction to the letter:
"Correction to who to address in letter. Address letter to [UC]
as Chairman and CC [UC's investor] as Executive Director. Please
acknowledge . "
72. On September 28, 2012, the UC mailed a check for
$3,000 with JESSICA CALDERON' s name written on it to RONALD
CALDERON' s residence in Montebello, California.
73. On October 2, 2012, the UC received an email from
m
RONALD CALDERON stating that JESSICA CALDERON was on hand "24/7"
if the UC needed her. On or about October 4, 2012, the UC sent
- 47 -
an email to RONALD CALDERON saying, among other things, "we can
definitely discuss [JESSICA CALDERON] when I get back." 8
•74. On October 23, 2012, the UC received an email from
jessicacalderon@aol.com stating, among other things, "Just want
to thank you for all you are doing and also want to set up a
meeting with you and [a celebrity's son] for future possible
opportunities to collaborate with your studio for future
projects. Also wanted to reach out to you about wanting to be a
possible contributor of our Skate World Revolution. . .Would love
to come by the studio and help out in any way that I can. I am
available Mondays, Thursday, Fridays. . . Sincerely [JESSICA
CALDERON] . "
75. The following day, on October 24, 2012, the UC met
RONALD CALDERON for dinner at a restaurant located in downtown
Los Angeles. During the meeting, RONALD CALDERON asked the UC
if he could give JESSICA CALDERON a task just so that she had
something to do. The UC reminded RONALD CALDERON that he did
not hire JESSICA CALDERON to do work and had hired her for the
tax credit legislation. The UC said there was no work for
JESSICA CALDERON to do at the studio. RONALD CALDERON asked the
UC if she could just do something for the purpose of
"legitimizing the whole thing." RONALD CALDERON said he was
The UC was in Spain at the time of this email exchange and
had informed CALDERON.
- 48
feeling guilty and that just having her run something across
town would be enough, just so something was on record. The UC
told RONALD CALDERON he would keep an eye out for upcoming work
and would let RONALD CALDERON know. The UC asked RONALD
CALDERON how he should respond to the email he had received from
JESSICA CALDERON. RONALD CALDERON told the UC to tell JESSICA
CALDERON that he wanted to meet the celebrity's son and to say
he (the UC) wanted more information about the skate park.
76. On October 26, 2012, the UC received an email from
JESSICA CALDERON, which she sent using the email account
icumanana@aol . com . CALDERON told the UC that if he was
interested in purchasing a liquor license for the UC studio, the
type of license he was looking for was a "Type 48" license.
JESSICA CALDERON explained that " [b] y going to design school
lowledge
[she had] gained the knowledge and the resources on building and
regulations for creating commercial restaurants/bars/night
clubs." She added, "Please use this to your advantage since I
work for you." The UC responded, "Hi [JESSICA CALDERON], I
already have someone looking into this issue, thanks."
The UC had previously told RONALD CALDERON and THOMAS CALDERON
that he was interested in obtaining a liquor license for the UC
studio, but it was not something he had shared with JESSICA
CALDERON.
49 -
iv. The Trips to Las Vegas
77. On October 16, 2012, the UC met RONALD CALDERON and
THOMAS CALDERON for dinner. Before their meeting, the UC
received an email from RONALD CALDERON stating, "I have a
surprise guest meeting us tonight." When the UC arrived to the
dinner, RONALD CALDERON explained that the surprise guest was
supposed to be Senator de Leon. However, after speaking with
Senator de Leon on the telephone, RONALD CALDERON informed the
UC that Senator de Leon would not be joining them for dinner.
78. On October 24, 2012, RONALD CALDERON and the UC had
lunch in downtown Los Angeles. During the meeting, RONALD
CALDERON told the UC that he was upset that Senator de Leon had
■
up,
not shown up for dinner on October 16, 2012. RONALD CALDERON
said that Senator de Leon wanted to be the next Senate Pro Tern
and that the UC would want to have a good relationship with him
as the next leader of the Senate. The UC asked RONALD CALDERON
if helping Senator de Leon would help RONALD CALDERON. RONALD
CALDERON said that it would because Senator de Leon could be
extremely helpful in getting RONALD CALDERON several
appointments, such as an appointment to the Unemployment Board
or the Board of Equalization.
79. On October 25, 2 012, the UC met RONALD CALDERON and
Senator de Leon for dinner at a restaurant in downtown Los
Angeles. During the meeting, they discussed the tax credit
- 50 -
legislation and an amendment that would lower the threshold to
$750,000. At the end of the meeting, after Senator de Leon had
left, RONALD CALDERON told the UC that Senator de Leon liked the
UC. The UC asked RONALD CALDERON whether donating to Senator de
Leon would help RONALD CALDERON, When RONALD CALDERON indicated
that it would, the UC told RONALD CALDERON that because it
sounded like Senator de Leon supported the legislation the UC
would support Senator de Leon .
80. On October 29, 2012, the UC received an email from
RONALD CALDERON asking if the UC was having any luck arranging a
trip to Las Vegas for RONALD CALDERON to celebrate Halloween.
After exchanging several emails regarding the trip to Las Vegas
and the UC's ability to attend, the UC wrote back, "I'll call
you tonight with more details but I have a VIP table for you at
the Bank for Wednesday. Nelly is hosting/performing and you've
got a front row seat on the action!"
81. On October 30, 2 012, the UC contacted RONALD CALDERON
on the telephone and told RONALD CALDERON that he had paid
$4,000 to reserve the VIP table for RONALD CALDERON at the Bank,
a nightclub in Las Vegas, on Halloween night. The UC told
RONALD CALDERON that he would not be able to attend the trip.
Towards the end of their conversation, RONALD CALDERON asked
about JESSICA CALDERON' s paycheck by asking the UC, "And then uh
as far as the monthly thing, you're going to take care of that
- 51 -
or you want to give it to me Friday?" The UC responded, "Yeah.
Yeah. Uh, you know what, I didn't even think about it. We're
already coming up on it aren't we?" The UC asked RONALD
CALDERON if he could bring "it" with him to their next meeting
(November 2, 2012) and RONALD CALDERON said, "Why don't you
bring it Friday, that way you don't have to mess with the mail."
82. Shortly after their telephone conversation ended, the
UC received an email from RONALD CALDERON. The email said,
" [UC] , I'm feeling really bad about you not being at the club at
so much expense! The c h.e c l^i for [JESSICA CALDERON] is much more
of a priority for me. Please don't hesitate to cancel. I
totally understand. Let me know what you decide." The UC
responded, "Hey [RONALD CALDERON], seriously not a big deal.
You've done so much for [the UC studio] , I was feeling bad that
they didn't have a better table. Nevertheless, if you feel
uncomfortable, I can still cancel. Just let me know." The UC
later received an email from RONALD CALDERON saying, "Ok well I
forgot I had talked it up to some friends Saturday and now they
are looking forward to it so I sheepishly will take you up on
your offer and take the table at the Bank."
83. On November 1, 2012, the UC received several emails
from RONALD CALDERON containing photographs apparently taken
from the VIP table at the Bank, including a photograph taken
with two individuals who appear to be rappers Nelly and T.I.
- 52 -
(Exhibit 1.) One of the emails said, "Our view from our
table." 10
84. On November 2, 2012, the UC met RONALD CALDERON for
dinner at a restaurant in downtown Los Angeles. During the
meeting, RONALD CALDERON told the UC that none of the people he
had invited to Las Vegas showed up, so he flew one of his
employees out to meet him. RONALD CALDERON said that Senator de
Leon was "onboard" with the tax credit legislation and that "if
s want to get it through next year we are gonna need his help
and he will support it." However, California Governor Jerry
Brown had asked RONALD CALDERON not to bring up the tax credit
legislation until after the election was over because of
Proposition 30, a ballot measure sponsored by the Governor that
sought voter approval for a different tax increase. After,
having dinner, the UC and RONALD CALDERON walked back to the
UC's apartment to have a cigar. The UC gave RONALD CALDERON a
check for $3,000 with JESSICA CALDERON listed as the payee. The
UC told RONALD CALDERON he was trying to be discreet. RONALD
CALDERON thanked the UC.
85. On November 20, 2012, the UC met RONALD CALDERON for
dinner at a restaurant in downtown Los Angeles. At one point
10 On November 8, 2012, the UC received an email from the
Director of VIP services for the Light Group, an entertainment
group which owns a series of clubs in Las Vegas. It contained
an itemized copy of the charges incurred at the Bank on October
31, 2012, which totaled $3,939.56 for the entire evening.
- 53 -
during the meeting, RONALD CALDERON advised the UC to have lunch
with JESSICA CALDERON sometime or to invite her to tour the UC
studio. The UC reminded RONALD CALDERON that hiring JESSICA
CALDERON was never about that. RONALD CALDERON said, "I know, I
know, it never was, but you know you can understand how she
feels. She's the recipient of most of that and she's like *I
feel guilty cuz I'm not doing anything' you know, but just to
make her feel, recognize what she does." Afterwards, the UC
provided RONALD CALDERON with another check for $3,000 with
JESSICA CALDERON listed as the payee.
86. On December 4, 2012, RONALD CALDERON contacted the UC
and
over the telephone and told him that Senator de Leon was having
a fundraiser in connection with the Manny Paquiao fight in Las
Vegas on December 8, 2012. RONALD CALDERON said that in
exchange for a donation of $10,000, the donor would receive two
tickets to the fight and VIP accommodations at a Las Vegas
hotel. RONALD CALDERON asked the UC if he was interested in
paying for RONALD CALDERON and the UC to attend the event and
said, "if you can't go I'll take my brother Tom or somebody, but
I'd rather - I'd rather you first take a shot at it." The UC
told RONALD CALDERON he would have to get back to him with an
answer.
87. Later that day, the UC sent an email to RONALD
CALDERON saying, "As [you] know, we have the $750K legislation
54
coming up, and it's probably the businessman in me, but I think
we can get something in return for supporting [Senator de Leon]
in this event. Inasmuch as I would love to just send you and
[THOMAS CALDERON] to Vegas this weekend, I want to make sure
that [Senator de Leon] knows we expect his support for the
legislation if you attend. Is there any way we can do that? It
just doesn't make good business sense if we do not get some
assurances from [Senator de Leon] before we commit. I don't
want to put too much in an email...
88. The UC received an email from RONALD CALDERON that
said, " [UC] ! It doesn't work that way. You cannot have a quid
pro quo discussion with a legislator. However, I am sure he
will appreciate your support very very much. Also, keep in mind
he has always been supportive of anything that will further
opportunities for minorities. At the end of the day you are
investing in the future leader of the Senate whom you are
building a very good relationship. He is also my very good
friend and has always supported me and my efforts. Also keep in
mind [Senator Steinberg] is still leader and is on the same
page. Therefore, I recommend yes. But it's your call."
89. The UC responded, "I guess I just want to feel more
comfortable that [Senator de Leon] knows who I am, what [the UC
studio] is about, and that he's on the same page."
- 55 -
90. The UC received another email from RONALD CALDERON
that said, "I will make sure you get some quality time with
[Senator de Leon] this weekend. It takes more than one meeting
to get to know someone. Look at us! This is a way of showing
[Senator de Leon] you want to develop a solid relationship. I
need to know ASAP. Just trust me. He hangs tough with his
friends ! "
91. On December 5, 2012, the UC met RONALD CALDERON for
dinner at an event honoring a California State Assemblyman. The
UC asked RONALD CALDERON when there would be hearings on the
$750,000 amendment to the tax credit legislation. RONALD
CALDERON said the only agreement they had with Governor Brown
was not to hold any hearings until after the election, so now
they could do whatever they wanted. RONALD CALDERON told the UC
he had until January 28, 2013 to get the bill in, but after that
he could still introduce a spot bill. RONALD CALDERON explained
that spot bills were bills you could set aside as a vehicle for
legislation. RONALD CALDERON said he felt they probably would
not need to use a spot bill.
92. The UC apologized about his earlier emails regarding
Senator de Leon's fundraiser and said it was not about the
money. RONALD CALDERON told the UC that he was using RONALD
CALDERON' s capital with Senator de Leon and that Senator de Leon
would be onboard with the tax credit legislation because the UC
56 -
was with RONALD CALDERON. RONALD CALDERON said Senator de Leon
would not do anything to hurt the $750,000 amendment, but that
"he's got a lot of people asking for favors, not just [RONALD
CALDERON] . " RONALD CALDERON said he received a call from
Senator de Leon's fundraiser and they needed to know the UC's
answer by the following day. Later that evening, RONALD
CALDERON told the UC that THOMAS CALDERON did not know RONALD
CALDERON was helping the UC and indicated that THOMAS CALDERON
would be upset if he knew because the UC had not returned THOMAS
CALDERON' s calls regarding hiring THOMAS CALDERON as a
consultant. RONALD CALDERON said he told THOMAS CALDERON the UC
was not saying no and that it was just a matter of when.
93. The following day, on December 6, 2012, the UC told
RONALD CALDERON over the telephone that he would buy one ticket
to Senator de Leon's fundraiser ( i.e. , make a $5,000 donation),
but not two tickets as RONALD CALDERON had originally mentioned.
Later that day, the UC received emails from two individuals who
identified themselves as partners for a consulting firm hired by
Senator de Leon. They gave the UC instructions on how to make
the $5,000 donation, which the UC followed before sending them a
check for $5 , 000 .
94. On December 18, 2012, the UC met RONALD CALDERON for
breakfast at a restaurant in downtown Los Angeles. During the
meeting, RONALD CALDERON gave the UC a box of cigars and a
- 57 -
coffee maker as gifts for the holidays. RONALD CALDERON told
the UC that the coffee maker, which was still wrapped at the
time, was from JESSICA CALDERON. RONALD CALDERON told the UC,
"Well, you know, she knows that you and I are working together
and she is still the beneficiary of our relationship and she
feels, you know, like wow, you know, I want to do something...."
95. On January 2, 2013, the UC received an email from
RONALD CALDERON. In it, RONALD CALDERON asked the UC if he had
sent the $3,000 check for JESSICA CALDERON. The UC said he had
not and asked RONALD CALDERON if he should mail it or bring it
with him to their next meeting. The UC received an email back
from RONALD CALDERON saying the UC should just mail the $3,000
check, which the UC did on January 3, 2 013
v.
The Spot Bill
11, 2013,
96. On January 11, 2013, the UC met RONALD CALDERON for
lunch at a restaurant in downtown Los Angeles. During the
meeting, RONALD CALDERON told the UC that he could get a bill
number and possibly hearings scheduled for the tax credit
legislation by the end of January 2013.
97. On January 15, 2013, FBI SA ^r.^^^ who was
assigned to the FBI's Sacramento Field Office, met with
who is unaware of the FBI' s ongoing undercover investigation,
told SaP^SSSI amon 9 other things, BLv?????i^^
58
that the UC, as well as other smaller production studios , were
"clamoring" for the $1 million threshold in the tax credit
legislation to be lowered so that smaller productions could
benefit from the program.
100. On March, 11, 2013 RONALD CALDERON called the UC
and left a voicemail to advise the UC that he just arrived
in Sacramento and was driving to the Capitol. The UC then
called RONALD CALDERON and told him that his (the UC's)
father had just been diagnosed with cancer and that UC
would be gone for an extended period of time, 11 The UC told
RONALD CALDERON that UC-3 wanted to meet with RONALD
CALDERON on March 21 st in Miami, Florida. The UC explained
that UC-3 was willing to hire THOMAS CALDERON to handle
things while the UC was away. The UC said that UC-3 was
also willing to include the $3,000 previously being paid to
JESSICA CALDERON in his payments to THOMAS CALDERON.
101. On March 21 , 2 013, RONALD CALDERON and THOMAS
CALDERON met with UC-3 in Miami to discuss UC-3 hiring
THOMAS CALDERON. UC-3 asked RONALD CALDERON if he would
still support the tax credit legislation if UC-3 did not
hire THOMAS CALDERON. RONALD CALDERON said, "Absolutely,
you have my support even if you don't hire TOM." However,
RONALD CALDERON advised UC-3 that if he did hire THOMAS
CALDERON, it would make the tax credit legislation happen
faster. RONALD CALDERON told UC-3 that he needed to make
11 The UC, who was first introduced to RONALD CALDERON in
February 2012, was in the process of being reassigned to a
different FBI Field Office located overseas when he placed this
telephone call .
- 60 -
the tax credit legislation look like it benefitted
everyone .
102. On March 26, 2013, UC-3 met with RONALD CALDERON
in Miami. While they were meeting, THOMAS CALDERON called
RONALD CALDERON on his cellular telephone and RONALD
CALDERON allowed UC-3 to hear part of his conversation with
THOMAS CALDERON using his speaker phone. UC-3, RONALD
CALDERON and THOMAS CALDERON tentatively agreed to allow
THOMAS CALDERON' s consulting fee to be paid through
Calif ornians For Diversity. Once the telephone call ended,
RONALD CALDERON told UC-3 that he needed JESSICA CALDERON' S
payment for her school. RONALD CALDERON told UC-3 that
legally it was a problem for UC-3 to pay RONALD CALDERON
for the tax credit legislation, so he needed the payments
to go through JESSICA CALDERON. UC-3 and RONALD CALDERON
discussed ways in which they could make the payments look
legitimate. RONALD CALDERON asked UC-3 if he would be
willing to pay $10,000 (instead of just $5,000 for THOMAS
CALDERON) per month to Calif ornians for Diversity. In
other words, add JESSICA CALDERON' s $3,000 payment to
THOMAS CALDERON 7 s payment plus $2,000 because THOMAS
CALDERON would have to pay taxes on that additional money.
RONALD CALDERON told UC-3 that THOMAS CALDERON had control
over the Calif ornians for Diversity account. UC agreed to
- 61
think about it. While UC-3 was taking RONALD CALDERON back
to the airport to catch his (RONALD CALDERON' s) flight to
California, UC-3 gave RONALD CALDERON a white envelope
containing $3,000 in cash.
103. On April 2, 2013, RONALD CALDERON contacted UC-3
via telephone and suggested that UC-3 should have the
$10,000, including the $3,000 payments previously going to
JESSICA CALDERON, go through THOMAS CALDERON' s company, the
Calderon Group, instead of Calif ornians for Diversity:
RC: I had gone around and around with different
options in my head since you and I had
talked. And I thought I had a solution and
then I got hit with a. . . uh, you know,
blindsided. The Latino Caucus, you know, we
meet every couple of weeks or so, the Caucus
meets and the Executive Board meets on
different days, but they had a meeting and
they had a vote on amending the bylaws . And
there was also a vote on, you know the Chair
is changing some policy, and he wants to be
a little more autonomous than having to get
a 2/3 vote for every move that we make. So
on consultants for committees, so they have
3 committees and I have the one committee,
but the 1 committee that you and I have been
discussing, the Calif ornians for Diversity,
is tied into the Latino Caucus in terms that
it's being sanctioned by them and that's why
I'm able to raise the money for the purpose
of promoting numbers in the Caucus. So, the
bylaw was changed that he's got authority on
any consultants that are hired that are paid
over $5K a month. So anything under 5
there's no vote involved and there's no...
the Chair's not involved.
UC-3: Wait, who has authority? Tom or you?
- 62 -
No, the Chair of the Caucus. In other
words, he has to authorize anything over
$5K. So right now, Tom is already getting
$5K a month from the Caucus, from our
committee. For us to add to that - number
one, it T s going to bring too much attention
to us in what we're doing and right now
we 1 re in a fundraising mode. And number
two, then I have to go and get permission
from the Chair to get more and I don't want
to have do that. So doing any more. . .that,
that - it just brings too much attention.
So the other option I had. . . So then I
figure I got to. talk to Tom and I got to let
Tom know what our arrangement is . The
arrangement I had with [the UC] , in terms of
Jessica and if he would be willing to pay
her from that. So we went back and forth
and he said if he does, and he gives her
cash, there's some tax liability on his part
that he's going to have to absorb. He'll
probably just say, I'm making "X" amount a
month and he's going to pay taxes on that
regardless of what he gives to Jessica. So
you and I had talked. . .Tom and I talked
about 5, he mentioned expenses and maybe an
additional 1,500 or 2,000 on top of that.
And then the 3 that Jessica was already
making on contract comes out to an even 10.
The cleanest thing would be, you have direct
contract as a consultant on the film
making... on the film credit project. You
could do it anyway you want to do it monthly
or 6 months, he doesn't care. Make it a
straight 10 to him, he'll do the 3 directly
to Jessica and it's all clean. It's all up
and up. It's business. I know you were
hoping for the non-profit side... it's just
not , . .
Yeah, I would have enjoyed the tax break.
Honestly, I was prepared to do the quarterly
at 10 with you on that. I really wanted to
have that little bit of distance between you
and I. You understand what I'm saying?
Just to keep things - the appearance of
things to be a little more clean.
Your contract is with Tom and I have nothing
to do with his company and his consulting
firm. And he does consulting in the
healthcare industry, in the insurance
industry, the water industry. He's just an
all around business consultant.
So now, he's on board with the Jessica
thing. So I can talk freely with him about
that now?
Yes, yes.
Ok, alright. . . I'm looking out for you
brother. I didn't want to step on any toes.
And I didn't know how he was going to feel
about that. So as long as everything's out
in the open. . . That makes me feel a lot
better, by the way, that we're all on the
same page and we don't have to keep, any
secrets, because, obviously this is
important to all of us .
It's all out now. For me, it's nothing
against my brother. I love my brother, but
it was none of his business.. It was
something that me and [the UC] negotiated
directly and it had nothing to do with Tom.
I didn't see any reason to bring it up, but
since I couldn't find any other options I
thought, ok, well let's lay it all out and
make it (UI) so we could make it work.
Alright, so where exactly are we with the
legislation? I know last time we talked you
said something would happen through a
subcommittee in April, right?
Yeah, we don't have a committee. It's not
assigned to the committee yet , so it ' s not
on the (UI) to be heard yet cause I'm still
working on it. So all I've been doing
between - since I saw you and now is talking
to - trying to get some people together.
Get the coalition together. Get leadership
behind me, so that when I hear the bill I
get the support I need to get out of
committee. And that's going well. I 1 11 be
able to get it out of committee, that won't
be a problem.
104. RONALD CALDERON has advised UC-3 that he is
attempting to have Senator Ted Lieu add the $750,000
amendment to a bill (SB 370) Senator Lieu recently
introduced in the California Senate, which would create a
tax incentive for companies that produce commercials in
California. On April 26, 2013, I visited the website
www.leginfo.ca.gov, a website hosted by the State of
California, and learned that on February 19, 2013, RONALD
CALDERON introduced Senate Bill ("SB") 317 ("the spot
bill"). As of this date, substantive language has not been
added to the bill. I further learned that no language
relating to the $750,000 amendment to the tax credit
legislation has been added to Senator Lieu's SB 370. On
May 2, 2012, I again visited www.leginfo.ca.gov and learned
that a previously scheduled committee hearing on the bill
had been cancelled by the bill's author on May 1, 2 013.
D. RONALD CALDERON HIRING UC-2 AS A LEGISLATIVE
STAFFER
i . . The $5 0,000 Special Fund
105. On June 21, 2012, when RONALD CALDERON and the
UC were having dinner at a restaurant in Pico Rivera and
RONALD CALDERON first asked the UC to hire JESSICA CALDERON*
as an employee, see supra f 24, RONALD CALDERON had
indicated that he was willing to hire the UC's girlfriend
(UC-2) if the UC hired JESSICA CALDERON. RONALD CALDERON
told the UC he would do this because "[i]t helps both of
[them] . " Id, RONALD CALDERON made similar offers to hire
UC-2 after this meeting.
106. On October 16, 2012, as they were leaving dinner, see
supra H 77, the UC took RONALD CALDERON up on his offers. The
following is an excerpt from the draft transcript of that
recorded conversation:
UC You remember when we talked last time
where... .my place.
RC Yeah,
UC And you talked about the potential for
bringing her in.
RC Right , right , right .
UC Do you still have any availability in
your office?
RC Well, I had a spot. And, I.... There is
a will, there is a way. So, put it
that way.
UC Okay .
RC So. If you wanna give her a shot in
the district, I will see what I can do.
UC Okay, Let me kind of spell it out,
RC Yeah .
UC So, her modeling thing...
- 66 -
Yeah.
...isn't working out the way she wanted
it to.
Okay.
She is a little discouraged,
Yeah.
And, it would mean, I think, a
wonderful world to her if you talk to
her on the 28th and were able to say,
hey, we'd love to have you. Come in,
work for us.
Okay. All right.
She comes with, you know, issues.
Yeah.
It is not a big thing. But, if you are
willing to take that on... —
Every girl has issues,
And, I don't want you to think that I
am forgetting about you for
doing.... cause this is huge for me* That
oj E|| 1}
I am flush right now.
It's a good idea right? Good idea!
It was outstanding. Your idea was
At some point , you're gonna have to
form that association.
I am sure I will.
[Laugh] ,
[Laugh] ,
We will have to make it
I'll tell you how good it is, I told
you about how they were willing to pad
the budget little bit for potential
consulting or" whatever it is...
Yeah, yeah, yeah. Right,
So, three picture deal gives me $50,000
for each year for three years. To do
whatever I want.
Oh, nice.
Whatever I want for that $50 , 000. So,
I wanna talk to you about what I can do
with that $50,000.
Okay.
So....
You mean, on top of what you are
already doing for us .
Okay, ^_
I mean, if there is something that you
think that I can do to help you out
with that fifty each year, you tell me.
And, I will set it up.
If it means
is. Think about it.
Yeah.
But, doing this for [UC-2] ...
Yeah.
is a huge, huge deal for me. And, it
would help me out tremendously.
Cause, it is kind of a, kind of a
bus ines s trip , too ,
So, I will work out a strategy and will
make it happen.
You think...this is still that same job
with,..
Yeah, yeah, yeah.
„,with benefits and all that stuff?
Yeah, No. I will just have to. Look,
I am in so tight with the pro ^t em to
do.... He will do whatever I want. But,
you know, I gotta make [01]. ..make it
I think [UI] do it.
I will make it worthwhile, I
appreciate it.
No problem, man .
I do. I really do.
All right. All right,
; , man ■
- 69 -
107. On October 24, 2012, when RONALD CALDERON and the UC
met at a restaurant in downtown Los Angeles, see supra H 78,
RONALD CALDERON told the UC what progress he had made on getting
UC-2 a job. RONALD CALDERON said j^T^
it would have to be a "special ask" made to Senator
Steinberg. RONALD CALDERON said he did not think it would be an
issue. RONALD CALDERON told the UC that UC-2's salary would be
part of the budget and that there had been an article in the
newspaper about how RONALD CALDERON was paying staff that did
not meet very often. 12 The UC told RONALD CALDERON that getting
UC-2 a job would be a huge favor and in return the UC had the
"special fund" that he was still looking for ideas from RONALD
CALDERON on how to spend.
108. On October 29, 2012, the UC sent an email to RONALD
CALDERON advising that he (the UC) may have a meeting with his
investor and receive the first $50,000 transfer he had
previously mentioned. See supra % 106. RONALD CALDERON
responded, "Nice! I have a x small ask' of you in that regard
next time we have a chance to meet."
12 On August 12, 2 012, a Sacramento newspaper published an
article pointing out that California's Senate Select Committee
on International Business Trade was staffed with three employees
whose combined salaries cost taxpayers more than $170,000 a
year, yet it had not met even once in the past two years, and
its only member was its chairman, RONALD CALDERON. See
"California Legislature's 'Select Committees' Cost A Lot With
Little Accountability," Sacramento Bee (August 12, 2012).
70 -
ii . The $5,000 Payment for Zachary Calderon' s Tuition
109. At their next meeting, which took place on November
2, 2012, see supra % 84, RONALD CALDERON brought up the $50,000.
RONALD CALDERON told the UC, "this particular semester coming
up, for Zach, urn, they raised the fees and my salary is going
down in December another five percent... I was gonna ask you one
of two things. One, urn, I need 5, I'm gonna be short 5..."
RONALD CALDERON then told the UC, "we could do a loan, that
would be easy, and I could pay you back in March, the other is,
this , this 50,000 that you, you' re trying to set aside for
whatever purposes maybe we could... maybe we can get a $5,000
check to Berklee College of Music and Zach just turns it in."
110. The UC told RONALD CALDERON that he was okay with
paying the $5,000 towards the tuition, but said it would only
the $50, 000.
put a small dent in the $50,000. RONALD CALDERON mentioned
several different accounts into which he was considering having
the UC deposit the remaining money (Calif ornians for Diversity,
Senator de Leon, Ronald Calderon for Controller, Ronald Calderon
Officeholder, and a Los Angeles City Councilman) . The UC told
RONALD CALDERON to spell out where he wanted the money to go on
a piece of paper and the UC would do it. It was around this
time that RONALD CALDERON told the UC he should be able to get
UC-2 a job in January 2013.
- 71 -
111. On November 20, 2 012, when the UC met with RONALD
CALDERON for dinner at a restaurant in downtown Los Angeles, see
supra % 85, the UC asked RONALD CALDERON about UC-2's job and
gave RONALD CALDERON a $5,000 check for Zachary Calderon' s
tuition with the payee portion left blank. RONALD CALDERON
asked the UC if the money was coming out of "the fund" and the
UC said yes. The UC asked RONALD CALDERON what UC-2 would be
doing when she came to work for RONALD CALDERON. RONALD
CALDERON said that Michelle Pyne, one of his staff members,
would take UC-2 "under her -wing." The UC asked if there was
sr ner -w:
do in oi
anything UC-2 had to do in order to prepare herself for the job
and RONALD CALDERON said no.
iii . The Lady Gaga Concert Fundraiser
112. On December 5, 2 012, while at the dinner event
honoring a California State Assemblyman, see supra % 91, RONALD
CALDERON told the UC that he was still working on getting UC-2's
job and that Senator Steinberg had recently opened up a
committee, which RONALD CALDERON described as a placeholder.
113. On December 18, 2012, when the UC met RONALD CALDERON
for breakfast in downtown Los Angeles, see supra f 94, the UC
asked RONALD CALDERON whether UC-2 needed to consider the
possibility of starting a job with RONALD CALDERON when making
her holiday travel plans. RONALD CALDERON said he was still
waiting to hear back from Senator Steinberg regarding his "wish
- 72 -
list," but he did not think it would be an issue and felt UC-2
should just enjoy her holiday vacation.
114. On January 2, 2013, the UC received an email from
RONALD CALDERON inviting him to a Lady Gaga concert fundraiser
to benefit "Ronald Calderon for Controller 2014" and "Senator
Lara for Senate 2016." The email said the fundraiser would be
held on January 20, 2013 and that RONALD CALDERON was hoping the
UC and UC-2 could attend.
115. On January 8, 2013, the UC received an email from
RONALD CALDERON regarding UC-2's job with RONALD CALDERON. The
email stated that RONALD CALDERON needed UC-2's resume. After
receiving this email, the UC contacted RONALD CALDERON via the
telephone and asked if UC-2 genuinely needed a resume and, if
so, what should be on it. RONALD CALDERON told the UC he would
send the UC an application for UC-2 to fill out and that a
resume was not necessary .
- 73 -
iv. The $25,000 Payment to Calif ornians For
Diversity
116. On January 11, 2013, when the UC and RONALD CALDERON
met for lunch in downtown Los Angeles, see supra f 96, RONALD
CALDERON told the UC that he should be able to hire UC-2 by the
end of the month. RONALD CALDERON and the UC discussed the
remaining money in the $50,0 00 fund. RONALD CALDERON told the
UC he should use part of that money to pay $3,900 for the Lady
Gaga concert fundraiser on January 20, 2013, and contribute
$25,000 to a non-profit organization named Calif ornians For
Diversity, which RONALD CALDERON said was managed by Yolanda
Miranda, RONALD CALDERON told the UC to save some of the
remaining money for a trip to Miami, which the UC and RONALD
CALDERON had previously discussed making so that RONALD CALDERON
could meet UC-3. See supra % 103. RONALD CALDERON gave the UC
an envelope setting forth what information RONALD CALDERON
needed in order to hire UC-2, including, among other things, her
work history. Afterwards, RONALD CALDERON invited the UC to
Sacramento, California to meet Senator Steinberg.
117. On January 12, 2 013, the UC received an email from
Yolanda Miranda, the accountant and Treasurer for both the
Diversity PAC and Calif ornians for Diversity . The email said,
"Per Senator Ron Calderon here is an invoice from the
Calif ornians for Diversity Organization. Please let me know if
- 74 -
the invoice was for [the UC Studio] ." An invoice for $25,000
was attached to the email. The invoice identified Calif ornians
for Diversity as a 501(c) (4) Nonprofit Public Benefit
Organization .
118. On January 15, 2013, the UC mailed a letter
referencing the Lady Gaga fundraiser and a check for $3,900 to
Ronald Calderon for State Controller, 550 South Hope Street,
Suite 1900, Los Angeles, California. The UC also mailed a check
for $25,000 to Californians for Diversity, 728 West Edna Place,
Covina, California. Two days before the UC mailed the checks,
he spoke with RONALD CALDERON on his cellular telephone and told
RONALD CALDERON that before he mailed out the checks he wanted
to make sure there would be no "curveball" regarding UC-2's job.
RONALD CALDERON told the UC there would not be and that the UC
should mail out the checks. On January 15, 2 013, the UC left
RONALD CALDERON a voice mail on his cellular telephone notifying
him that the checks were in the mail. That same day, between
approximately 8:00 p.m. and approximately 9:30 p.m., RONALD
CALDERON exchanged 12 text messages with THOMAS CALDERON over
his cellular telephone. The following day, THOMAS CALDERON left
a voicemail for the UC stating that he wanted to personally
thank the UC for his contribution to the Californians for
Diversity and that the money would be used to promote members of
- 75
the Latino Caucus and to do some outreach for them as well as
some issue oriented events.
119. On March 9, 2013, the UC received an email from
RONALD CALDERON saying, " [UC] . Can you write a $320 check to my
State Senate Office Holder account from your special funds
account so I can cover my air fare to Miami?" On March 10,
2013, the UC mailed a $3,200 check to RONALD CALDERON' s office
holder account via United States mail.
rr _ : m also
disclosed, among other things, the following:
a. Calif ornians for Diversity is a charitable arm of
the Diversity Politi
b.
supposed to be used f
Latino Caucus,
ction
Comm
ittee ("PAC")
the money it receives is
aw new members to the
ach
c. The money that Calif ornians for Diversity-
receives basically goes to THOMAS CALDERON in exchange for
THOMAS CALDERON doing the work. 13 ^mM^m '
13
|reiterated his belief that the $25,000 was
provided in exchange for RONALD CALDERON agreeing not to fight
for the Chairmanship of the Latino Caucus and allow Senator Lara
to become Chair, which has been corroborated. See infra 123
(b) and (c) .
- 76 -
that Senator Lara was the one who approved the transfer of money
($25,000) from the Diversity PAC to Californians for Diversity.
believed this had happened even though political
candidates like Senator Lara are not supposed to control how a
14
PAC spends its money and can only make recommendations.
e. The reason for having the money ($25,000) sent to
Californians for Diversity was so that RONALD CALDERON and
THOMAS CALDERON could build up the funds in that account and
take the money out later. §Sf # jSSSESk Hil T^^mmmmmmmm^^
THOMAS CALDERON has the ability to withdraw money
from Californians for Diversity because he is the Executive
Director. In fact, THOMAS CALDERON had already withdrawn money
from Californians for Diversity and said it was for services
rendered.
14 On April 1, 2 013, I reviewed California Bank and Trust bank
records for Californians for Diversity. I observed a check was
deposited from "Yes We Can, 400 Capitol Mall, 22nd Floor,
Sacramento, 95814," and was made for $25,000 to the Californians
for Diversity. The check was dated January 2, 2013.
Handwritten on the check was "ID 1334930." The memo section
noted "Latino Caucus Member Development."
- 11 -
g. In addition to the $25,000 payment from Senator
Lara, over the past month, |jri*^^
h. UC-2 had no public service experience and her
last three jobs were modeling, working for the UC studio, and
working at a fashion studio in New Orleans, Louisiana.
g. In addition to the $25,000 payment from Senator
Lara, over the past month, RONALD CALDERON had been encouraging
STEVE to secure a position for UC-2 on RONALD CALDERON ' s staff.
this made ^yy^ reluctant to hire UC-2, because she would
clearly have no idea what she was doing if hired. Moreover,
there were currently no positions on RONALD CALDERON' s staff and
^^^^^^^^^^^^^^
f fefr wi lll could not simply manufacture one.
i. On Friday (January 11, 2013), RONALD CALDERON
told |(lfgjjg|| that he was having lunch with the UC ( see supra ^
96, 116) and asked || v jg| what information he |f *m**mj^ would need
in order to hire UC-2. Then, on Sunday (January 13, 2013),
.rded UC-2's work history to
LD CALDERON forwards SFF^fi
to put in the necessary paperwork to hire UC-2
immediately. jTfrftq»l| asked RONALD CALDERON if Senator Ste
had cleared hiring UC-2 and RONALD CALDERON said yes.
j . On Monday (January 14, 2 013) , ||| lasked
| j the $25, 000 Senator Lara
had contributed to Californians for Diversity came from the
Latino Caucus or the Diversity PAC. that the
$25,000 came from the PAC and that, in addition to that $25,000
- 78 -
15
According to FBI Analyst $5,000 was paid
from Calif ornians for Diversity to THOMAS CALDERON' s company,
the Calderon Group Inc.; however, approximately $25,000 remained
in the account after this transaction took place
16
79 -
121. On February 5, 2103, the UC and UC-2 received an
email from RONALD CALDERON saying, "[UC-2], Congratulations!
Looking forward to working with you. I know you'll prove to be"
an invaluable asset to this office ! "
122. On February 15, 2013, UC-2 received a direct deposit
of $684.77 into her bank account. According to UC-2's bank
records, the payment came from "Senate st CA des : legpayroll
I'd: 0000006995 INDN: [UC-2} CO I'd: 9888883698 PPD . » UC-2 has
done no work for RONALD CALDERON or the California Senate. 17
123. In addition to the $684.77 payment to UC-2, the
following events, which took place during my investigation of
RONALD CALDERON, corroborated several key aspects of
(RONALD CALDERON' S and THOMAS CALDERON' S
Control Over Californians for Diversity)
a. On October 16, 2012, when the UC first
mentioned paying RONALD CALDERON an additional $50,000 in
exchange for getting UC-2 a job, see supra 77, 106, RONALD
CALDERON told the UC about Californians for Diversity:
.f orn:
i non-
r. SC
do .
Okay. Yeah. We have this non-profit. It is called
Californians for Diversity. So, we are gonna build
this thing up and what it does mainly is issue
oriented marketing. So, we want to talk about, you
know...whether Prop-32 or Prop-33 or you know, it is a
good thing for people, we can put money into that. We
wanna talk about just in general, you know, a budget
plan or whatever we can do...issue stuff. Uh... And, then
Tom and I down the road, we build that up, we can pay
ourselves. Just kind of make, you know, part of
living. So, that's something we are probably gonna
(The Deal RONALD CALDERON Had With Senator
Lara Over the~ Latino Caucus Chairmanship)
b. During their meeting on November 20, 2 012,
see supra K^f 85, 111, RONALD CALDERON told the UC how Senator
Lara had previously agreed to step down from being Chairman of
the Latino Caucus to allow RONALD CALDERON to succeed him.
Senator Lara later changed his mind and wanted to remain as the
Chairman. This disappointed RONALD CALDERON and he told the UC,
"Your word is your bond." RONALD CALDERON said the final vote
would not be until January 2 013 and he was coming up with a
strategy for how to deal with the situation.
c. On December 5, 2 012, while at the dinner
- 81 -
event honoring a California State Assemblyman, see supra tl 91/
112, RONALD CALDERON told the UC that it appeared Senator Lara
would remain as the Chairman of the Latino Caucus. RONALD
CALDERON told the UC how he had brokered a deal with Senator de
Leon. Although RONALD CALDERON was upset about not becoming the
Chairman, Senator de Leon told RONALD CALDERON that if he
allowed Senator Lara to keep the position as Chairman, he
(Senator de Leon) would do the following for RONALD CALDERON:
(1) give RONALD CALDERON a paid political appointment after he
left the Senate; (2) give RONALD CALDERON his own
consultant/ fundraiser, who would remain on the executive
committee; and (3) give RONALD CALDERON $25,000 in seed money
from one of the accounts so that RONALD CALDERON could hire
consultants and do presentations. RONALD CALDERON told the UC
he accepted the deal.
d. According to Senator Lara's website
(sd33.senate.ca.gov), he recently "was elected Chair of the
23 member Latino Legislative Caucus with a supermajority
vote .
E. THE SPINAL SURGERY LEGISLATION
i . Summary
124. My investigation has developed probable cause to
believe that RONALD CALDERON and THOMAS CALDERON were involved
in a separate bribery scheme with MICHAEL D. DROBOT, the Chief
82 *
Executive Officer of Pacific Hospital of Long Beach ("PHLB").
In summary, there is probable cause to believe that beginning on
a date unknown and continuing through to the present, in return
for payments from DROBOT, RONALD CALDERON and THOMAS CALDERON
were helping DROBOT enrich himself and PHLB by supporting .
legislation that would delay or limit changes in California's
worker's compensation laws, particularly those laws relating to
the amount of money medical care providers are reimbursed for
performing spinal surgeries .
125. DROBOT was willing to pay RONALD CALDERON and THOMAS
CALDERON to delay or limit changes in California's worker's
compensation laws because DROBOT and others had conspired to use
the existing provisions in the worker's compensation laws, as
well as several other means, to commit widespread health care
fraud, including paying illegal kickbacks (or bribes) to
surgeons performing spinal surgeries at PHLB , to the substantial
benefit of DROBOT, PHLB, and the surgeons who received the
kickbacks . 18
126. In exchange for supporting legislation beneficial to
DROBOT' s financial interests, RONALD CALDERON received
18 On April 4 th and 5 th , 2013, federal agents from the FBI , IRS,
USPS, and DCIS executed search warrants at the executive offices
of PHLB and at other locations related to the health care fraud
scheme. The search warrants were authorized by United States
Magistrate Judge Jean P. Rosenbluth on April 3, 2013. See supra
1 10.
- 83 -
approximately $28,000 in bribes from DROBOT. The bribes were
disguised as payments to RONALD CALDERON' s son, Zachary
Calderon, who, according to RONALD CALDERON, purportedly worked
for one of DROBOT' s companies each summer and was paid a salary
of $10,000 each summer. There is probable cause to believe
those payments were actually bribes directed to RONALD CALDERON.
For instance, for the last two years those payments (totaling
approximately $18,000) were deposited directly into the bank
account RONALD CALDERON shared with his wife, Ana Calderon; and
shortly before the most recent payments, RONALD CALDERON sent
DROBOT two emails, one, dated June 18, 2 012, saying, "Hi Mike!
Thanks again for the ride up and lunch! So this is a reminder
for you to arrange ... to divide pay into 2 payments. First one
due July 19th and second one due August 16 th which will be his
last day of work. Thanks," and the second, also dated June 18,
2012, saying, "Mike. Just in case you forgot or didn't know the
total amount is 10k. "
127. DROBOT has also been paying THOMAS CALDERON $10,000
per month in connection with the bribery scheme. Although the
payments are purportedly for THOMAS CALDERON to acts as DROBOT' s
consultant in connection with the spinal surgery legislation,
Moreover, RONALD CALDERON has made it clear to the UC that he
- 84 -
and THOMAS CALDERON have been working together to help DROBOT
with the spinal surgery legislation.
128. I discuss in more detail in the four sub-sections
below: (a) in subsection ii DROBOT ' s health care fraud scheme
and the importance to that scheme of the California worker's
compensation laws governing reimbursement for implantable
devices used during spinal surgeries; (b) in subsection iii,
three bills relating to these California worker's compensation
laws that there is probable cause to believe were influenced by
RONALD CALDERON and THOMAS CALDERON; (c) in subsection iv,
statements by RONALD supporting probable cause to
believe that he and THOMAS CALDERON sought to influence these
bills in return for payments f
rom DRi
OBOT; and (d)
ii , DROBOT' s
1CCLX L. 11 VwGL.
:e Fraud
Scheme
129. According to the website www.phlb.com, DROBOT is the
Chief Executive Officer of PHLB , which is located in Long Beach,
California .
13 0. According to the Wall Street Journal, PHLB primarily
services California's workers' compensation patients who require
spinal fusion, a surgical procedure that joins two or more of
- 85 -
the patient's vertebrae. See "In Small California Hospitals,
the Marketing of Back Surgery," Wall Street Journal (February 9,
2012) . Between 2008 and 2010, PHLB performed more workers'
compensation related spinal fusion surgeries than any other
California hospital, beating out much larger and more reputable
hospitals such as Cedars Sinai Medical Center in Los Angeles.
Id.
131. On or about August 9, 2010, the FBI began
investigating DROBOT for health care fraud. On or about
November 30, 2 012, I spoke with FBI SA P^ ^^,^^^ the agent
assigned to the DROBOT investigation, and learned the following:
a. One of the reasons PHLB became a leader in spinal
fusion surgeries was because DROBOT and others known and unknown
to the government had conspired to, among other things, pay
conspired to,
bribes) to th<
illegal kickbacks (or bribes) to the surgeons performing the
spinal fusion surgeries at PHLB.
b. Spinal fusion surgeries paid for under
California's workers' compensation program were extremely
profitable to DROBOT because California's workers' compensation
laws allowed DROBOT to seek separate reimbursement from the
State Compensation Insurance Fund ("SCIF") and other insurance
providers for the costs of the implantable medical devices used
during the spinal surgery. Rather than requiring DROBOT and
others to submit a single reimbursement form for the overall
- 86 -
cost of the spinal fusion surgery, California law permitted
DROBOT to submit separate reimbursement forms for the surgery
itself and for the costs of the implantable devices used during
that surgery .
c. Under California law, the cost of the
implantable devices was viewed as a "pass through' 1 expense. As
a result, SCIF and other insurance providers would reimburse for
the implantable devices at no more than $250 over the cost of
what the hospital paid to purchase the implantable devices, as
documented by an invoice for the implantable devices submitted
by the hospital.
d. DROBOT used this aspect of California's worker's
compensation law, as well as several other means, to commit
large scale health care fraud. In summary, DROBOT and others
would submit inflated invoices for up to ten times the actual
costs of the implantable devices used in the spinal surgeries.
These inflated invoices purported to be from third party
vendors. In actuality, however, DROBOT and others purchased the
devices from related persons and entities who inflated the costs
of the devices so that the inflated invoices could be submitted
for reimbursement to SCIF and other insurance providers. When
the claims for reimbursement for inflated costs were paid,
DROBOT used a portion of the proceeds to pay the physicians
87 -
performing the spinal fusion surgeries kickbacks of
approximately $10,000 to $20,000 per surgery
19
DROBOT's financial interest in spinal surgery legislation was
evidenced in the Wall Street Journal article. It states that
the California Workers' Compensation Institute, an insurer's
group, estimated that the provision of the workers' compensation
law that allowed separate billing for implantable medical
devices, hardware, and instrumentation added $55 million to the
cost of the workers' compensation program in 2008 alone. In
2010, California's Workers' Compensation Institute ("CWCI")
estimated that spinal implant pass -through payments topped $67
million in 2010, up 22 percent from 2008.
iii . Three Pieces of Legislation and Their Potential
Impact on DROBOT's Health Care Fraud Scheme
132. I have been able to identify three pieces of
legislation introduced in the California legislature relating to
the DROBOT bribery scheme. 21 I have researched these pieces of
legislation using the website www.leginfo.ca.gov and have had
several conversations relating to these pieces of legislation
ctive
with a detective for the California
Department of Insurance. Detective '^ gy—JC| has been assisting
SA I ^^Ajl in his health care fraud investigation and works
regularly with California's worker's compensation laws. Based
on my research, and my conversations with Detective and
SA [ ffiSB^ i have learned the following regarding these three
pieces of legislation
Bill #1
On February 28, 2 011, Senator de Leon introduced a
piece of legislation ("Bill #1"). As originally drafted, Bill
#1 would have eliminated the ability to seek separate
reimbursement for the cost of implantable devices used during
spinal surgery, thus eliminating a primary basis of DROBOT's
health care fraud scheme. In particular, as originally drafted,
Bill #1 would have amended Section 5318 of the Labor Code, the
provision of the workers' compensation law that allowed DROBOT
21 My investigation is still ongoing and thus I may uncover
other legislation related to the DROBOT bribery scheme.
89 -
and others to seek separate reimbursement for implantable
medical devices used during spinal fusion surgeries, as follows:
Section 5318 of the Labor Code is amended to read:
5318. (a) Implantable Spine surgeries with implantable
medical devices, hardware, and instrumentation for
Diagnostic Related Groups (DRGs) . . . shall be
reimbursed to the performing hospital at the rate of
1.8 times the applicable DRG rate, with no separate
reimbursement for any implantable devices, hardware,
or instrumentation . (Emphasis added. )
b. On April 27, 2 011, Senator de Leon amended
Bill #1 to remove the language eliminating separate
reimbursements for implantable devices. The amended. Bill #1
would have continued to allow separate reimbursements for
implantable devices so long as, in most cases, the total
reimbursement to the provider did not exceed two times a
specified reimbursement rate for the surgery as a whole. In
particular, as amended, Bill #1 would have amended Section 5318
to read as follows, retaining language authorizing separate
reimbursement based on documented costs of implantable devices:
Spinal surgeries with implantable medical devices,
hardware, and instrumentation as defined by Medical
Severity Diagnostic Related Groups (MSDRGs) ... shall be
separately reimbursed at the provider's documented
paid cost , plus an additional 10 percent of the
provider's documented paid cost, not to exceed a
maximum of two hundred fifty dollars ($250) , plus any
sales tax and shipping and handling charges actually
paid. Unless the case qualifies for outlier
reimbursement, total payment to the provider shall not
- 90 -
exceed 2 times the applicable MSDRG rate. 22 (Emphasis
added. )
c. Based on the evidence discussed in
subsections iv and v below, there is probable cause to
believe that Senator de Leon amended Bill #1 to remove the
language eliminating separate reimbursements at the request
of THOMAS CALDERON. As discussed in subsection iv below,
there is probable cause to believe that Senator de Leon
allowed Bill #1, as amended at the request of THOMAS
CALDERON, to become inactive because Senator de Leon was
not receiving sufficient "help" in return for his backing
Bill $ 1 .
Bill #2
d. - On March 15, 2012, Senator Ted Lieu introduced a
piece of legislation ("Bill #2"). Bill #2 would have repealed
Section 5318 of the Labor Code, thus eliminating separate
reimbursement for implantable devices. It is not certain why
Senator Lieu introduced Bill #2, but I have learned that one of
Senator Lieu's committees had requested a study that showed that
spinal implant pass-through payments had topped $67 million in
2010 and were up 22 percent from 2008. According to SA
if Bill #2 were enacted, it would have disrupted DROBOT's health
care fraud scheme ,
22 According to the website www.leginfo.ca.gov, Bill #1 was
never passed or enacted and remains in an inactive status.
e , if if if i " | j |
j^" kjj RONALD CALDERON and THOMAS CALDERON went with DROBOT to
Senator Lieu's office and put enough pressure on Senator Lieu
that he dropped his sponsorship of Bill #2. On August 31, 2012,
Bill #2 was placed in an inactive status at the request of then
Assembly Member Charles Calderon, RONALD CALDERON' s oldest
brother .
Bill #3
>n, RC
f . On August 24, 2012, Senator de Leon took over
authorship of another piece of legislation ("Bill #3"), which
Senator Lieu had originally introduced in the Senate. When
Senator de Leon took over authorship of Bill #3, he added
language calling for the repeal of separate reimbursement for
implantable devices used during spinal surgery. Unlike Bill #2
however, Bill #3 did not immediately eliminate separate
reimbursement for implantable devices. Instead, Bill #3
provided, in pertinent part, as follows:
On or before July 1, 2013, the administrative director
shall adopt a regulation specifying an additional
reimbursement for MS-DRGs Medicare Severity Diagnostic
Related Groups (MS-DRGs ) 02 8, 029, 03 0, 4 53, 4 54, 455,
and 456 to ensure that the aggregate reimbursement is
sufficient to cover costs, including the implantable
medical device , hardware , and instrumentation . This
regulation shall be repealed as of January 1, 2014,
unless extended by the administrative director.
As a result, Bill #3 allowed DROBOT and others to continue
seeking separate reimbursement for the cost of implantable
- 92 -
medical devices through December 31, 2013, by requiring the
administrative director, who was responsible for paying
reimbursements for those devices, to adopt regulations providing
for such separate reimbursements that would be in force through
December 31, 2013,
g. On August 31, 2012, Bill #3 passed in both houses
of the California Legislature by overwhelming majorities. It
took effect on January 1, 2013. RONALD CALDERON was one of the
few Senators to vote against the measure. As discussed in
subsection v below, however, RONALD CALDERON has told the UC
that he and THOMAS CALDERON helped get in to Bill #3 the
language that was more favorable to DROBOT,
iv. RONALD CALDERON 7 s Statements Relating to the
Legislation
i5lation
ber 5, '2012, w
13 3. On December 5, '2 012, when explaining to the UC why he
should make a $5,000 or $10,000 donation towards Senator de
Leon's Manny Paquiao fundraiser in Las Vegas, see supra f 93,
109, RONALD CALDERON used one of THOMAS CALDERON' S clients
(DROBOT) as an example, making the following statements:
a. RONALD CALDERON told the UC that 80% of the
client's business was in spinal implants and that every single
year there had been some kind of legislation to reduce the rates
for the spinal surgery. RONALD CALDERON told the UC that THOMAS
CALDERON was trying to get an exception in the legislation by
- 93 -
working with the Director of Labor Relations, and that THOMAS
CALDERON eventually got Senator de Leon involved in trying to
get an exception in the legislation. RONALD CALDERON said that
Senator de Leon had a relationship with labor and labor was
strongly opposed to any exceptions, but that despite this
Senator de Leon initially agreed to do the language for the
legislation. (Based on my knowledge of this investigation and
my research relating to the legislation discussed in subsection
ii above, I believe that these statements relate to Senator de
Leon's initial agreement to support Bill #1.)
legislation to Senator Lieu. According to RONALD CALDERON, what
I haven't seen any help." (Based on my knowledge of this
investigation and my research relating to the legislation
discussed in subsection ii above, I believe that these
statements relate to Senator de Leon's decision to drop his
support of Bill #1, and the subsequent introduction by Senator
Lieu of Bill #2.) Given the context of this conversation
(whether the UC should make a political contribution to Senator
de Leon) and my training and experience, I believe that what
RONALD CALDERON was conveying to the UC was that Senator de Leon
94 -
dropped his support of the legislation (Bill #1) because he had
not received any money ( i.e. , "help") .
c, RONALD CALDERON told the UC that Senator de Leon
would "freak out" if he were involved in the sort of
conversations RONALD CALDERON and the UC had with one another.
Based on my training and experience, I know that bribes and
discussions regarding bribe payments in exchange for official
action are usually conducted through middlemen or individuals
with whom you have long-standing relationships built on trust.
Therefore, I believe that what RONALD CALDERON was conveying to
the UC by this statement was that Senator de Leon would "freak
out" if he knew RONALD CALDERON was telling the UC that Senator
de Leon had asked for money in connection with supporting Bill
#1.
2 18, 2012, R
d. On June 18, 2012, RONALD CALDERON sent an email to
DROBOT saying, "Hi Mike! Thanks again for the ride up and
lunch! So this is a reminder for you to arrange ... to divide
pay into 2 payments. First one due July 19th and second one due
August 16th which will be his last day of work. Thanks." That
same day, RONALD CALDERON sent DROBOT another email saying,
"Mike. Just in case you forgot or didn't know the total amount
is 10k." Ten days later, on June 28, 2012, RONALD CALDERON sent
DROBOT an email saying, "Reminder" and forwarded the initial
email .
- 95 -
e. The following day, on or about June 29, 2 012,
RONALD CALDERON told the UC that his son, Zachary Calderon, was
working for RONALD CALDERON' s friend, who owned a hospital in
Long Beach, California. On or about November 2, 2012, RONALD
CALDERON clarified this further and told the UC that Zachary
Calderon worked for his friend, who owned several surgery
centers in Long Beach, and made $10,000 each summer.
f. FBI Analyst pgS, \ ^fe^ has examined the bank
account records for RONALD CALDERON and his wife, Ana Calderon.
According to between 2011 and 2012, RONALD CALDERON
and his wife deposited four checks from two companies known to
be affiliated with DROBOT into their joint bank account. All of
the checks were payable to Zachary (or "Zachery") Calderon and
totaled approximately $18,000.
st check,
g. The first check, which was deposited on July 27,
2011, was from International Implants LLC and was in the amount
of $5,000. The second check, which was deposited on August 29,
2011, was also from International Implants LLC and was also in
the amount of $5,000. The third check, which was deposited on
August 1, 2 012, was from First Medical Management and was in the
amount of $1,490.95. The fourth check, which was deposited on
August 14, 2012,' was also from First Medical Management and was
in the amount of $7,018.10.
h. On or about February 21, 2013, IRS SA ttamg j
I ^MWWj^ reviewed Zachary Calderon' s individual tax returns for
the 2010 and 2011 tax years. According to S A |^HH|||Q during
both tax years Zachary Calderon claimed $10,000 in business
receipts and the IRS received 1099s for that amount from
International Implants LLC. On both tax returns, Zachary
Calderon listed "research" as his principal
business/profession/services. In tax year 2010, Zachary
Calderon deducted $6,826 in business expenses and only reported
$3 , 174 in income . The business expenses included, among others ,
$1,265 in "supplies," $240 in "utilities" and $1,821 in "office
expense." In tax year 2011, Zachary Calderon deducted $6,805 in
business expenses and only reported $3,195 in income. The
business expenses included, among others, $1,420 in "supplies,"
$280 in "utilities" and $1,768 in "office expense." The
business address listed on both tax returns was 908 North 2nd
Street, Montebello, California, which I know to be RONALD
CALDERON' s and Zachary Calderon' s personal residence. I believe
based on my training and experience and knowledge of this
investigation that RONALD CALDERON' s son Zachary Calderon
received an inflated salary from DROBOT for work he may or may
not have actually performed over the summer and, in exchange for
those payments, RONALD CALDERON took official action that would
delay or limit changes in California's workers' compensation
laws relating to DROBOT' s health care fraud scheme, particularly
- 97 -
the amount of money medical care providers are reimbursed for
performing spinal surgeries. Although Zachary Calderon reported
the money he received from DROBOT on his personal tax returns,
he did so in a way that made the payments appear to be
legitimate and to minimize the amount of taxes that would be
paid on the bribe.
i. On August 21, 2012, RONALD CALDERON sent an email
to Senator Steinberg saying, "Darrell. Rumor has it that there
is a deal and the language will be placed in Ted [Lieu's] bill
tomorrow. I though [t] u told us the chamber flew it up . fc g HB gHl
j. On November 2, 2012, RONALD CALDERON met with the
UC at his apartment in downtown Los Angeles and said the
following with respect to the spinal surgery legislation and his
friend who owns a hospital in Long Beach:
We've been keeping him in business now for the last
four years, because the governor kept pushing these
regs to cut the funding on these spinal surgeries for
workers' comp. All we've been trying to do is hold
off that cut so they continue paying for that. The
- 98 -
way it is now, they are leaving it up to the
administrator at workers' comp to decide how much they
pay for these implants and if they get cut out of that
they are out of business. So that's what we've been
working the last four or five years . You know. . .we've
kept them going. We've pushed it off, pushed it off,
pushed it off... (emphasis added.)
134. On April 30, 2013, RONALD CALDERON spoke with Zachary
Calderon over the telephone regarding the likelihood of Zachary
Calderon's continued employment with DROBOT's company for the
upcoming summer. The conversation came after FBI agents
executed search warrants at locations related to DROBOT's health
care fraud scheme on April 4, 2013 and April 5, 2013, which
conversation, RONALD CALDERON indicated to Zachary Calderon that
RONALD CALDERON
During the
summer job?
RC:
Nah I haven't heard from him. I mean I've heard from
him but I don't think he's talked to Mike [Drobot] .
ZC:
Oh, ok*
RC:
I wouldn't worry. I mean the businesses are still
running. They still need people there, so nothing's
changed .
ZC:
And they probably won't be able to offer as much
though .
RC:
Oh, yeah. All they're doing is investigating
records. . .computer records.
ZC:
Oh, ok,
- 99 -
RC: Cause there's some allegation by some disgruntled
doctor, a surgeon, who said he was bribing physicians
and what do you call it. . .kickback money to
physicians. Mike doesn't do that. He doesn't work
that way. But he's made a lot of money, so you know
they gotta check it out.
ZC: Ah, got it.
v. DROBOT's Statements Relating to the
Legislation
23 According to one newspaper, THOMAS CALDERON's financial
reports indicated that up until December 31, 2011, he had pulled
in more than $152,000 in campaign contributions and accumulated
nearly $31,300 in campaign expenses. The bulk of these early
contributions came from political committees and healthcare
corporations, including "$27,300 from administrators at Pacific
Hospital of Long Beach alone." See "Marquez Faces Crowded Field
In Assembly Race" The Downey Patriot (March 15, 2012) .
- 100 *»
24 On February 8, 2011, Lisa Middleton, retired former Vice
President of Internal Investigations of the State Compensation
Insurance Fund (SCIF) , was interviewed by FB I SAf ^ w fi ^B ^ and
California Department of Insurance Detective ^^^^ s ^^ l ^ ] [' : ^^^ '
Middleton advised that between 2002 and early 2004, DROBOT and
THOMAS CALDERON were part of negotiations between the SCIF and
DROBOT' S various business entities including Healthsmart
Pacific, Inc., and Pacific Hospital of Long Beach, CA for monies
DROBOT believed were owed to his companies from SCIF for unpaid
liens. DROBOT brought THOMAS CALDERON into the negotiations as
his consultant. Middleton advised that during the negotiation
process she never met THOMAS CALDERON f ace -to- face . However,
THOMAS CALDERON' S name was specifically mentioned to Middleton
as the source of several queries. SCIF settled with DROBOT in
early 2004 for $27.5 million. Middleton said DROBOT once told
her, "Of course I'm milking the system," According to
subpoenaed bank records for THOMAS CALDERON' s company, the
Calderon Group, Inc., on July 28, 2004, it received a check from
West Coast Surgery Center Management, LLC, a company known to be
affiliated with DROBOT, for $1 million dollars. In the memo
section of the check were typed the words "SCIF Settlement."
- 101 *
- 102 -
- 104 *
- 105 -
BACKGROUND REGARDING THE SUBJECT PREMISES
145 .
- 106 -
■
VII. SEARCH AND SEIZURE OF COMPUTER/ELECTRONIC/DIGITAL DATA
A. TRAINING AND EXPERIENCE
146. This application seeks permission to search for and
seize evidence (and contraband) of the crimes described above
stored on computers and electronic/digital devices
(collectively, "digital devices"), as well as any digital
devices that constitute (fruits and) instrumentalities of the
crimes .
147. I have spoken with SA | who has training
in the forensic examination of computers and digital devices.
SA |[^izzrf| related various information to me and/or confirmed
various information for me as noted below.
148. Based upon my training and experience, and
information related to me by agents and others involved in the
forensic examination of computers and digital devices including
SA ^ffffiigj I know that data in digital form can be stored on a
variety of systems, storage devices, or media including hard
107 -
disk drives, floppy disks, compact disks, magnetic tapes, flash
drives, and memory chips. Some of these devices can be smaller
than a thumbnail and can take several forms, including thumb
drives, secure digital media used in phones and cameras,
personal music devices, and similar items.
14 9. Based upon my training and experience, and the
investigation to date, I believe that computer (s) and digital
device (s) will be found at the premises.
150. Based upon my training and experience, and
information related to me by agents and others involved in the
forensic examination of computers and digital devices including
SA fr» ■ 'i gj I know that computers and digital devices are often
used to store information, very much the same way paper,
ledgers, files and file cabinets are used to store information.
I know that it is common today for businesses to utilize
computers to conduct their business and to store information
related thereto. I also know that it is common for individuals
to have personal computers and to use these computers to conduct
their personal affairs, their business affairs, and to store
m
information related thereto. I know based on my training and
experience, including prior investigations specifically related
to the investigation of public corruption and bribery, that
subjects who are engaged in corruption commonly store
-= 108 -
information related to their activities on computers and digital
devices .
151. In addition, there are a number of indicia that the
SUBJECT PREMISES has computer (s) and/or digital devices at the
B. REMOVAL OF DATA STORAGE DEVICES FOR REVIEW IN A
LABORATORY SETTING MAY BE REQUIRED
152. Based upon my training and experience, and
information related to me by agents and others involved in the
forensic examination of computers and digital devices including
SA p4^8Sgj [ I know that a forensic image is an exact physical
copy of a data storage device. A forensic image captures all
data on the subject media without viewing or changing the data
in any way. Absent unusual circumstances, it is essential that.
a forensic image be obtained prior to conducting any search of
data for information subject to seizure pursuant to the warrant.
I also know that during the search of the premises it is not
always possible to create a forensic image of or search digital
* 109 -
devices or media for data. I also know that it is frequently-
necessary to remove digital devices or media for later
laboratory evaluation off -site under controlled circumstances.
This is true for a number of reasons, including the following:
a. Searching digital devices can be a highly
technical process that requires specific expertise and
specialized equipment. Because there are so many different
types of digital devices and software in use today, it is
difficult to anticipate all of the necessary technical manuals,
specialized equipment, and specific expertise necessary to
conduct a thorough search of the media to ensure that the data
will be preserved and evaluated in a useful manner.
b. Searching digital devices can require the use of
precise, scientific procedures designed to maintain the
integrity of the evidence. The recovery of such data may
require the use of special software and procedures, such as
those used in a law enforcement laboratory.
c. The volume of data stored on many digital devices
is typically so large that it will be highly impractical to
search for data during the execution of the physical search of
the premises.' Storage devices capable of storing 500 gigabytes
of data are now commonplace in desktop computers. It can take
several hours, or even days, to image a single hard drive. The
larger the drive, the longer it takes. Depending upon the
- 110 -
number and size of the devices, the length of time that agents
must remain onsite to image and examine digital devices can
become impractical ,
d. Since digital data may be vulnerable to
inadvertent modification or destruction, a controlled
environment, such as a law enforcement laboratory, may be
essential to conduct a complete and accurate analysis of the
digital devices from which the data will be extracted. Software
used in a laboratory setting can often reveal the true nature of
data. Moreover, a computer forensic reviewer needs a
substantial amount of time to extract and sort through data that
is concealed or encrypted to determine whether it is evidence,
contraband, or an instrumentality of a crime.
e. Analyzing the contents of a computer or other
electronic storage device, even without significant technical
difficulties, can be very challenging, and a variety of search
and analytical methods must be used. For example, searching by
keywords, which is a limited text based search, often yields
thousands of hits, each of which must be reviewed in its context
by the examiner to determine whether the data is within the
scope of the warrant. Merely finding a relevant hit does not
end the review process. The computer may have stored
information about the data at issue which may not be searchable
text, such as: who created it; when and how it was created,
- Ill -
downloaded, or copied; when it was last accessed; when it was
last modified; when it was last printed; and when it was
deleted. The relevance of this kind of data is often
contextual. Furthermore, many common email, database, and
spreadsheet applications do not store data as searchable text,
thereby necessitating additional search procedures. To
determine who created, modified, copied, downloaded,
transferred, communicated about, deleted, or printed data
requires a search of events that occurred on the computer in the
time periods surrounding activity regarding the relevant data.
Information about which users logged in, whether users shared
passwords, whether a computer was connected to other computers
or networks, and whether the users accessed or used other
programs or services in the relevant time period, can help
determine who was sitting at the keyboard.
f. Searching digital devices can require the use of
precise, scientific procedures designed to recover latent data.
The recovery of such data may require the use of special
software and procedures. Data that represents electronic files
or remnants of such files can be recovered months or even years
after it has been downloaded onto a hard drive, deleted, or
viewed via the Internet. Even when such files have been
deleted, data can be recovered months or years later using
readily available forensic tools. Normally, when a person
deletes a file on a computer, the data contained in the file
does not actually disappear; rather, that data remains on the
hard drive until it is overwritten by new data. Therefore,
deleted files, or remnants of deleted files, may reside in space
on the hard drive or other storage media that is not allocated
to an active file. In addition, a computer's operating system
may keep a record of deleted data in a swap or recovery file or
in a program specifically designed to restore the computer's
settings in the event of a system failure.
153. This warrant seeks authority to seize contextual
data, that is, evidence of how a digital device has been used,
what it has been used for and who has used it. It can be very
important in criminal cases to seek "attribution" data so that
an event or communication can be associated with a person.
Based upon my training and experience, and information related
to me by agents and others involved in the forensic examination
of computers and digital devices including SA ^jmrnmrntfi this
authority is sought for a number of reasons:
a . In some instances , the computer "writes" to
storage media without the specific knowledge or permission of
the user. Generally, data or files that have been received via
the Internet are automatically downloaded into a temporary
Internet directory or cache. The browser typically maintains a
fixed amount of hard drive space devoted to such data or files,
- 113 -
and the files are only overwritten as they are replaced with
more recently viewed Internet pages. Thus, the ability to
retrieve artifacts of electronic activity from a hard drive
depends less on when the file was downloaded or viewed than on a
particular user's operating system, storage capacity, and
computer usage. Logs of access to websites, file
management/transfer programs, firewall permissions, and other
data assist the examiner and investigators in creating a
"picture" of what the computer was doing and how it was being
used during the relevant time in question. Given the
rant tn
: the d<
interrelationships of the data to various parts of the
computer's operation, this information cannot be easily
segregated.
b. Digital data on the hard drive that is not
:iated wit
currently associated with any file may reveal evidence of a file
that was once on the hard drive but has since been deleted or
edited, or it could reveal a deleted portion of a file (such as
a paragraph that has been deleted from a word processing file) .
Virtual memory paging systems can leave digital data on the hard
drive that show what tasks and processes on the computer were
recently used. Web browsers, email programs, and chat programs
store configuration data on the hard drive that can reveal
information such as online nicknames and passwords. Operating
systems can record additional data, such as the attachment of
114
peripherals, the attachment of USB flash storage devices, and
times the computer was in use. Computer file systems can record
data about the dates files were created and the sequence in
which they were created. This data can be evidence of a crime,
can indicate the identity of the user of the digital device, or
can point toward the existence of evidence in other locations
(or on other devices) .
c. Further, evidence of how a digital device has
been used, what it has been used for, and who has used it, may
be learned from the absence of particular data on a digital
device. Specifically, the lack of computer security software,
virus protection, malicious software, evidence of remote control
by another computer system, or other programs or software may
assist in identifying the user indirectly and may provide
evidence excluding other causes for the presence or absence of
the items sought by this application. Additionally, since
computer drives may store artifacts from the installation of
software that is no longer active , evidence of the historical
presence of the kind of software and data described may have
special significance in establishing timelines of usage,
confirming the identification of certain users, establishing a
point of reference for usage and, in some cases, assisting in
the identification of certain users. This data can be evidence
of a crime, can indicate the identity of the user of the digital
device, or can point toward the existence of evidence in other
locations. Evidence of the absence of particular data on the
drive is not generally capable of being segregated from the rest
of the data on the drive.
C. SEARCH PROCEDURE
154. In searching for data capable of being read, stored,
or interpreted by a computer or storage device, law enforcement
personnel executing the search warrant will employ the following
procedure :
a. On site search, if practicable. Law enforcement
officers trained in computer forensics (hereafter, "computer
personnel"), if present, may be able to determine if digital
devices can be searched on site in a reasonable amount of time
and without jeopardizing the ability to preserve data on the
-zing the a
such a sea
devices and conduct such a search if deemed practicable. Any
device searched on site will be seized if it contains any data
falling within the list of items to be seized as set forth in
the warrant and in Attachment B.
b. On site imaging, if practicable. If a digital
device cannot be searched on site as described above, the
computer personnel, if present, will determine whether the
device can be imaged on site in a reasonable amount of time
without jeopardizing the ability to preserve the data and
conduct such imaging if deemed practicable.
c. Seizure of digital devices for off -site imaging
and search. If no computer personnel are present at the
execution of the search warrant, or if they determine that a
digital device cannot be searched or imaged on site in a
reasonable amount of time and without jeopardizing the ability
to preserve data, the digital device will be seized and
transported to an appropriate law enforcement laboratory for
review.
d. Law enforcement personnel (potentially including,
but not necessarily limited to, computer personnel) will examine
the digital device to determine if it contains any data that
falls within the list of items to be seized as set forth in the
warrant and m Attachment B.
e. Law enforcement personnel will use procedures
designed to identify items to be seized under the warrant.
These procedures may include, without limitation, the use of a
"hash value" library to exclude normal operating system files
that do not need to be searched. In addition, law enforcement
personnel may search for and attempt to recover deleted, hidden,
or encrypted data to determine whether the data falls within the
list of items to be seized under the warrant.
f. If the original digital device was seized, law
enforcement personnel will perform an initial search of the
original digital device within a reasonable amount of time not
to exceed 120 days from the date of execution of the warrant.
If, after conducting the initial search, law enforcement
personnel determine that an original digital device contains any
data falling within the list of items to be seized pursuant to
this warrant , the government will retain the original digital
device to, among other things, litigate the
admissibility/authenticity of the seized items at trial, ensure-
the integrity of the copies, ensure the adequacy of chain of
custody, and resolve any issues that potentially might be raised
regarding changed conditions of the evidence. If the government
needs additional time to determine whether an original digital
device contains any data falling within the list of items to be
seized pursuant to this warrant, it may seek an extension of the
time period from the Court within the original 12 -day period
Court within t:
:ution of the w«
from the date of execu
g. If an original digital device does not contain
any data falling within the list of items to be seized pursuant
to this warrant , the government will : return that original
digital device to its owner within a reasonable period of time,
if it can be lawfully possessed; seal any image previously made
of the device; and not review the sealed image absent further
authorization from the Court.
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D. DATA TO BE SEIZED
155. Based upon my training and experience, and
information related to me by agents and others involved in the
forensic examination of computers and digital devices, I know
that, in order to search for data that is capable of being read
or interpreted by a computer, law enforcement personnel will
need to seize, image, copy, and/or search the following items,
subject to the procedures set forth herein:
a. Any computer equipment or digital devices that
are capable of being used to commit or further the crimes
outlined above , or to create , access , or store (evidence ,
contraband, fruits, or instrumentalities) of such crimes, as set
forth in Attachment B;
b. Any computer equipment or digital devices used to
facilitate the transmission, creation, display, encoding, or
storage of data, including word processing equipment, modems,
docking stations , monitors , printers , plotters , encryption
devices, and optical scanners that are capable of being used to
commit or further the crimes outlined above , or to create ,
access, process, or store (evidence, contraband, fruits, or
instrumentalities) of such crimes, as set forth in Attachment B;
c. Any magnetic, electronic, or optical storage
device capable of storing data, such as floppy disks, hard
disks, tapes, CD ROMs, CD Rs, CD RWs, DVDs, optical disks,
- 119 -
printer or memory buffers, smart cards, PC cards, memory-
calculators, electronic dialers, electronic notebooks, personal
digital assistants, and cell phones capable of being used to
commit or further the crimes outlined above, or to create,
access, or store (evidence, contraband, fruits, or
instrumentalities) of such crimes, as set forth in Attachment B;
d. Any documentation, operating logs, and reference
manuals regarding the operation of the computer equipment,
storage devices, or software;
e. Any applications, utility programs, compilers,
interpreters, and other software used to facilitate direct or
indirect communication with the computer hardware, storage
devices, or data to be searched;
f . Any physical keys, encryption devices, dongles,
or similar physical items which are necessary to gain access to
the computer equipment, storage devices, or data;
g. Any passwords, password files, test keys,
encryption codes, or other information necessary to access the
computer equipment, storage devices, or data; and
h . All records , documents , programs , applications ,
or materials created, modified, or stored in any form, including
in digital form, on any computer or digital device, that show
the actual user(s) of the computers or digital devices during
any time period in which the device was used to commit the
crimes referenced above, including the web browser's history;
temporary Internet files; cookies, bookmarked, or favorite web
pages; email addresses used from the computer; MAC IDs and/or
Internet Protocol addresses used by the computer; email, instant
messages, and other electronic communications; address books;
contact lists; records of social networking and online service
usage; and software that would allow others to control the
digital device such as viruses, Trojan horses, and other forms
of malicious software (or alternatively, the lack of software
that would allow others to control the digital device) .
i , All records , documents , programs , applications ,
or materials created, modified, or stored in any form, including
in digital form, on any computer or digital device, that show
evidence of counter- forensic programs (and associated data) that
■
are designed to eliminate data from the computer or digital
device .
j . All records , documents , programs , applications ,
or materials created, modified, or stored in any form, including
in digital form, on any computer or digital device, that show
contextual information necessary to understand the evidence,
contraband, fruits, or instrumentalities described in this
attachment .
- 121 -
E. RETENTION OF IMAGE
156. The government will retain a forensic image of each
digital device subjected to analysis for a number of reasons,
including proving the authenticity of evidence to be used at
trial; responding to any potential questions regarding the
corruption of data; establishing the chain of custody of data;
refuting any potential claims of fabrication, tampering, or
destruction with/of data; and addressing potential exculpatory
evidence claims where , for example , a defendant claims that the
government avoided its obligations by destroying data or
returning it to a third party.
F. INVENTORY AND RETURN
157. With respect to the seizure of electronic storage
media or the seizure or imaging of electronically stored
information, the search warrant return to the Court will
describe the physical storage media that were seized or imaged.
Prior Efforts to Obtain Evidence
158. The government has made prior efforts in other
judicial fora to obtain evidence possibly covered in the
requested warrant. See supra flf 8-11.
- 122 -
VIII. REQUEST FOR SEALING
159. The government's investigation of RONALD CALDERON and
the bribery schemes set forth above is still ongoing. If this
affidavit is filed publicly, there would be the obvious risk
that RONALD CALDERON or other individuals referenced in the
search warrant would learn of its existence and attempt to
destroy evidence of criminal activity before the warrant could
be executed and that persons identified as being under suspicion
of criminal activity might destroy evidence, coordinate their
stories before being interviewed by law enforcement or called to
testify, or might even flee the jurisdiction. Accordingly, I
request that this affidavit be filed and kept under seal until
further order of the Court. The government requests that the
Court's order not limit its ability to provide copies of the
ait
it
Court's search warrant authorization at the time the warrant is
executed as required by Federal Rule of Criminal Procedure
41(f). I further request that the Court's order not limit my
ability to provide copies of the affidavit to other law
enforcement officers and attorneys assisting with this
investigation.
*- 123 *
IX. CONCLUSION
160. Based on the foregoing, I believe there is probable
cause to believe that RONALD CALDERON has committed the Subject
Offenses and that the SUBJECT PREMISES will contain evidence,
contraband, fruits , or instrumentalities of those crimes .
- 124 -
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